Centrus Energy to Preserve Net Operating Loss Carryforwards and to Protect Centrus Stockholders with Stockholder Rights Plan
06 Abril 2016 - 6:36PM
Business Wire
Centrus Energy Corp. (NYSE MKT: LEU) announced today that its
Board of Directors has adopted a Net Operating Loss (NOL)
stockholder rights plan to seek to preserve its substantial tax
assets (NOLs) available to reduce potential future tax liabilities
and to protect the interests of the Centrus stockholders. As of
December 31, 2015, the Company had NOLs of approximately $325
million that can be used in certain circumstances to offset future
U.S. taxable income.
The Company’s ability to utilize its NOLs during future periods
could be substantially limited if the Company undergoes an
“ownership change” as defined in Section 382 of the Internal
Revenue Code. For this purpose, an ownership change generally
occurs if the Company's “five-percent stockholders” have
collectively increased their ownership in the Company’s common
stock by more than 50 percentage points over their lowest
percentage ownership at any time over a rolling three-year period.
The Company’s NOL rights plan is intended to reduce the likelihood
of an unintended ownership change occurring through the purchase of
the Company’s common stock.
In addition, in light of recently disclosed accumulations of the
Company’s shares in the market, this rights plan is intended to
enable all Centrus stockholders to realize the long-term value of
their investment and to reduce the potential that any person or
group could gain control of Centrus through open market
accumulation without appropriately compensating the Company’s
stockholders for such control or providing the Board sufficient
time to make informed judgments. The rights plan applies equally to
all current and future stockholders and is not intended to deter
offers that are fair and otherwise in the best interests of the
Company's stockholders.
In connection with the adoption of the rights plan, the Board
declared a dividend of one preferred-share-purchase-right for each
share of the Company’s Class A common stock and Class B common
stock outstanding as of April 6, 2016. Effective today, if any
person or group acquires 4.99% or more of the outstanding shares of
the Company’s common stock, or if a person or group that already
owns 4.99% or more of the Company’s Class A common stock acquires
additional shares representing 0.5% or more of the outstanding
shares of the Company’s Class A common stock (“acquiring person or
group”), then, subject to certain exceptions, there would be a
triggering event under the rights plan. The rights would then
separate from the Company’s Class A common stock and Class B common
stock and would be adjusted to become exercisable, at an initial
exercise price of $26.00, to purchase the number of 1/1000ths of a
share of a new series of the Company’s preferred stock equivalent
to the number of shares of Class A common stock or Class B common
stock, depending on the holder thereof, of the Company having, at
the time of the applicable triggering transaction, a market value
equal to twice the exercise price. The rights beneficially owned by
an acquiring person or group would become null and void, resulting
in significant dilution in the ownership interest of such acquiring
person or group.
The Board, or an independent committee of the Board, has the
discretion to exempt any acquisition of the Company’s common stock
from the provisions of the rights plan if it determines that doing
so would not jeopardize or endanger the Company's use of its tax
assets or is otherwise in the best interests of the Company. The
Board also has the ability to amend or terminate the rights plan
prior to a triggering event.
The Company expects to seek stockholder approval of the Rights
Plan in connection with the 2017 annual meeting. The rights issued
under the rights plan will expire if not approved by the Company's
stockholders prior to that date or on April 6, 2019, if the Rights
Plan is so approved. The rights may also expire on an earlier date
if certain events occur, as described more fully in the Section 382
Rights Agreement that the Company will file with the Securities and
Exchange Commission (SEC).
The adoption of the rights plan will not be a taxable event,
will not affect the reported financial condition or results of
operations of the Company and will not change the manner in which
the Company’s common stock is traded.
O’Melveny & Myers LLP is acting as Centrus’ legal
counsel.
Additional information regarding the rights plan will be
contained in a Form 8-K and in a Registration Statement on Form 8-A
that Centrus is filing with the SEC.
About Centrus Energy Corp.
Centrus Energy Corp. is a trusted supplier of enriched uranium
fuel for commercial nuclear power plants in the United States and
around the world. Our mission is to provide reliable and
competitive fuel goods and services to meet the needs of our
customers, consistent with the highest levels of integrity, safety,
and security.
Forward-Looking Statements:
This news release contains “forward-looking statements” within
the meaning of Section 21E of the Securities Exchange Act of 1934 -
that is, statements related to future events. In this context,
forward-looking statements may address our expected future business
and financial performance, and often contain words such as
“expects”, “anticipates”, “intends”, “plans”, “believes”, “will”,
“should”, “could”, “would” or “may” and other words of similar
meaning. Forward-looking statements by their nature address matters
that are, to different degrees, uncertain. These forward-looking
statements include, without limitation, the use of NOLs to offset
future taxable income and the use of the rights plan to prevent an
“ownership change” as defined in Section 382 of the Internal
Revenue Code. For Centrus, particular risks and uncertainties that
could cause our actual future results to differ materially from
those expressed in our forward-looking statements include, but are
not limited to: the difficulty of determining all of the facts
relative to Sections 382 and 383 of the Internal Revenue Code,
unreported buying and selling activity by stockholders and
unanticipated interpretations of the Internal Revenue Code and
regulations, our ability to generate taxable income to utilize all
or a portion of the NOLs prior to the expiration thereof, the
possibility that the rights plan may not successfully deter
stockholders from triggering an ownership change through the
purchase of Class A Common Stock of Centrus, risks associated with
the enforceability of the rights plan under Delaware law or other
applicable law, risks that the rights plan may discourage third
party offers to acquire Centrus, or any interests therein, risks
that the rights plan may have an adverse effect on the value of
Centrus’ Class A Common Stock or Class B Common Stock, risks and
uncertainties related to the adoption of fresh start accounting;
risks related to our significant long-term liabilities, including
material unfunded defined benefit pension plan obligations and
postretirement health and life benefit obligations; risks related
to the limited trading markets in our securities and risks relating
to our ability to maintain the listing of our common stock on the
NYSE MKT LLC; the continued impact of the March 2011 earthquake and
tsunami in Japan on the nuclear industry and on our business,
results of operations and prospects; the impact and potential
extended duration of the current supply/demand imbalance in the
market for low-enriched uranium; uncertainty regarding our ability
to commercially deploy competitive gas centrifuge enrichment
technology; risks relating to our dependence on intercompany
support from Enrichment Corp; risks relating to our sales order
book, including uncertainty concerning customer actions under
current contracts and in future contracting due to market
conditions and lack of production capability; risks associated with
our reliance on third-party suppliers to provide essential services
to us; pricing trends and demand in the uranium and enrichment
markets and their impact on our profitability; movement and timing
of customer orders; changes in U.S. government priorities and the
availability of government funding, including loan guarantees and
ongoing funding for Oak Ridge National Laboratory; the impact of
government regulation by the U.S. Department of Energy and the U.S.
Nuclear Regulatory Commission; uncertainty regarding the potential
for the U.S. Department of Energy (“DOE”) to seek to terminate or
exercise its remedies under the June 2002 DOE-USEC Agreement; the
outcome of legal proceedings and other contingencies (including
lawsuits and government investigations or audits); the competitive
environment for our products and services; the potential for
further demobilization or termination of the American Centrifuge
project; changes in the nuclear energy industry; the impact of
financial market conditions on our business, liquidity, prospects,
pension assets and insurance facilities; revenue and operating
results can fluctuate significantly from quarter to quarter, and in
some cases, year to year; and other risks and uncertainties
discussed in our filings with the Securities and Exchange
Commission, including our Annual Report on Form 10-K and quarterly
reports on Form 10-Q, which are available on our website at
www.centrusenergy.com. We do not undertake to update our
forward-looking statements except as required by law.
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version on businesswire.com: http://www.businesswire.com/news/home/20160406006552/en/
Centrus Energy Corp.Investors:Don Hatcher,
301-564-3460orMedia:Jeremy Derryberry, 301-564-3392
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