USEC has entered into a standstill agreement with the strategic investors in its American Centrifuge Plant. Toshiba and Babcock & Wilcox Investment Company (B&W) were due to complete the second phase of investment by 30 June 2011, but a conditional commitment on a loan guarantee had not been received from the Department of Energy. The standstill agreement gives USEC an additional six weeks to secure conditional approval of the $2 billion loan guarantee.
Toshiba and B&W injected $75 million into the American Centrifuge project in 2010 and were due to invest an additional $50 million before the end of June 2011, providing the Department of Energy granted conditional approval of the loan guarantee.
In a statement USEC said that it has been working diligently with DOE over the past several months to conclude the review process for its loan guarantee application, but that it had been unable to do so by the 30 June deadline.
“This standstill agreement provides the limited additional time needed for DOE to complete its review and reach a decision during July," said John K. Welch, USEC president and chief executive officer.
The three companies have agreed not to end their deal until 15 August. If USEC secures the conditional approval for the guarantee by then it will receive the $50 million. A third payment of $75 million would be due when the loan guarantee is finally approved.