The Maryland company that wants to build a uranium enrichment plant in southern Ohio said Monday that it will declare bankruptcy early next year.
The announcement comes as USEC Inc., approaches a Jan. 15 deadline for a two-year research and development project aimed at convincing the federal government to continue to pay for the commercialization of its uranium enrichment project. Currently, the Department of Energy pays for 80 percent of the research work with USEC paying 20 percent. So far, the government has spent $256.9 million on the project.
The company will file for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware in the first quarter of 2014. The bankruptcy itself would not put a halt to the research and development project.
“This is not about liquidity,” said Paul Jacobson, a spokesman for USEC. “We have plenty of money to run our business and so forth. This is about a large amount of debt taken on a few years ago.”
In a press release, the company said it is restructuring in order to pay off some $530 million in debts to bondholders that were scheduled to mature in October 2014.
Jacobson said the restructuring plan will both reduce the debt held by the corporation as well as “put us on a stronger financial footing.”
For years, USEC has hoped that the federal government would sign onto a loan guarantee that would allow them to commercialize their technology.
But the program has been met with skepticism from environmental and taxpayers’ groups. “Certain principles of the marketplace and fiscal responsibility have to apply, and there are those in the industry who say this has been a terribly mismanaged program,” said Pete Sepp of taxpayer watchdog the National Taxpayers Union.
The company recently touted a success in its long-troubled efforts to commercialize their technology: The uranium enrichment plant, located in Piketon, Ohio, has been successful in recent tests of its “cascade” of 120 machines. In doing so, the company met three milestones required to receive Department of Energy support. The company needs DOE support in order to meet the requirements of its debtors.
The Ohio congressional delegation this month sent a letter to Secretary of Energy Ernest Moniz urging him to “provide a path forward” on its work in Piketon.