Centrus Energy Corp. (NYSE MKT: LEU) (the “Company”)
announced today the preliminary results in connection with its
previously announced private exchange offer (the “Exchange
Offer”) to exchange any and all of the Company’s 8.0% PIK
toggle notes due 2019/2024 (the “Outstanding Notes”) for up
to (i) $85 million 8.25% senior secured notes due 2027 (the “New
Notes”), (ii) $120 million 7.5% cumulative redeemable preferred
stock (the “Preferred Stock”), and (iii) $30 million in
cash. The New Notes will be guaranteed on a subordinated and
limited basis (the “Guarantee”) by the Company’s subsidiary,
United States Enrichment Corporation. The terms and conditions of
the New Notes will be substantially similar to those of the
Outstanding Notes after giving effect to the proposed amendments
pursuant to the Consent Solicitation discussed below, except in
terms of interest and maturity. In addition, the indenture
governing the New Notes will not include termination provisions
with respect to the Guarantee that exist in the indenture governing
the Outstanding Notes (the “Original Indenture”) and will
include restrictions on certain transfers of cash to acquire equity
interests.
The Exchange Offer is being made upon the terms and subject to
the conditions set forth in the confidential exchange offer
memorandum dated January 5, 2017 (the “Exchange Offer
Memorandum”).
The following table sets forth the principal amount of
Outstanding Notes validly tendered and not validly withdrawn as of
5:00 p.m., New York City time, on January 19, 2017 (the “Early
Tender Deadline”).
OutstandingNotes to
beExchanged
CUSIP
Principal AmountOutstanding as
ofJanuary 5, 2017
PrincipalAmountTendered
8.0% PIK ToggleNotes due2019/2024
15643UAA2
$234,574,504
$161,800,473
As previously announced, the Exchange Offer and Consent
Solicitation will expire at 11:59 p.m., New York City time, on
February 2, 2017 unless extended (the “Expiration Date”).
The right to withdraw tenders of Outstanding Notes and related
consents terminated at 5:00 p.m., New York City time, on January
19, 2017 (the “Withdrawal Deadline”). Accordingly,
Outstanding Notes and related consents tendered before the
Withdrawal Deadline remain tendered and may not be withdrawn or
revoked, except in certain limited circumstances where additional
withdrawal rights are required by law.
The Exchange Offer is conditioned upon the receipt of valid
tenders of Outstanding Notes, not withdrawn, of at least $211.12
million aggregate principal amount of Outstanding Notes on or
before the Expiration Date (the “Minimum Participation
Condition”) and certain other conditions, including that the
issuance of the Preferred Stock will not result in an “ownership
change” for purposes of Section 382 of the Internal Revenue Code of
1986, as amended. As of the Early Tender Deadline, the Minimum
Participation Condition with respect to the Outstanding Notes has
not yet been met or waived. Pursuant to the “Support
Agreements,” described in the Offering Memorandum, any waiver
of the Minimum Participation Condition will be conditioned upon the
waiver thereof by noteholders party to the Support Agreements
holding, in the aggregate, no less than a majority of the
Outstanding Notes held by noteholders party to the Support
Agreements.
Further, in connection with the Exchange Offer, the Company is
also soliciting consents (the “Consent Solicitation”) to
implement certain proposed amendments to the Original Indenture, as
previously disclosed (the “Proposed Amendments”). Holders
may not consent to the Proposed Amendments without tendering their
Outstanding Notes and they may not tender their Outstanding Notes
without consenting to the Proposed Amendments.
The Exchange Offer and Consent Solicitation are subject to the
receipt of valid consents to the Proposed Amendments from the
holders of a majority of the outstanding principal amount of the
Outstanding Notes (the “Requisite Consents”). If the Company
receives the Requisite Consents and the other conditions to the
Exchange Offer are satisfied or waived, the Company will execute a
supplemental indenture making the Proposed Amendments to the
Original Indenture on or soon after the Expiration Date, but not
later than the date the Exchange Offer is consummated. The
supplemental indenture, by its terms, will become effective only
upon the consummation of the Exchange Offer.
As of the Early Tender Deadline, the Company has obtained the
Requisite Consents.
The Company has the right to amend, terminate or withdraw the
Exchange Offer and Consent Solicitation, at any time and for any
reason, including if any of the conditions to the Exchange Offer
and Consent Solicitation are not satisfied.
* * *
The New Notes, the Guarantee and the Preferred Stock will not be
registered under the Securities Act of 1933, as amended (the
“Securities Act”), and may not be transferred or sold in the
United States absent registration or an applicable exemption from
the registration requirements of the Securities Act. The Exchange
Offer is being made only to qualified institutional buyers,
accredited investors and, outside the United States, to persons
other than U.S. persons. The Exchange Offer is made only by, and
pursuant to, the terms set forth in the Exchange Offer Memorandum,
and the information in this press release is qualified by reference
to the Exchange Offer Memorandum.
This press release shall not constitute a solicitation of
consents, an offer to sell or the solicitation of an offer to buy
any security and shall not constitute an offer, solicitation or
sale in any jurisdiction in which such offering, solicitation or
sale would be unlawful. No recommendation is made as to whether
holders of the Outstanding Notes should tender their securities or
give their consent.
D.F. King (the “Exchange Agent”) is acting as the
Exchange Agent for the Exchange Offer and Consent Solicitation.
Requests for the Exchange Offer Memorandum and any supplements
thereto may be directed to the Exchange Agent at (212) 269-5550
(for brokers and banks) or (800) 848-3409 (for all others).
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. For Centrus Energy
Corp., particular risks and uncertainties that could cause our
actual future results to differ materially from those expressed in
our forward-looking statements include, risks and uncertainties
related to the limited trading markets in our securities; risks
related 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 (“LEU”); risks related to
actions that may be taken by the U.S. government, the Russian
government or other governments that could affect our ability or
the ability of our sources of supply to perform under contract
obligations, including the imposition of sanctions, restrictions or
other requirements; the impact of government regulation including
by the U.S. Department of Energy and the U.S. Nuclear Regulatory
Commission; the outcome of legal proceedings and other
contingencies (including lawsuits and government investigations or
audits); 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 current
production capability; risks associated with our reliance on
third-party suppliers to provide essential products or services to
us; pricing trends and demand in the uranium and enrichment markets
and their impact on our profitability; uncertainty regarding our
ability to commercially deploy competitive enrichment technology;
risks and uncertainties regarding funding for the American
Centrifuge project and our ability to perform under our agreement
with UT-Battelle, LLC, the management and operating contractor for
Oak Ridge National Laboratory, for continued research and
development of the American Centrifuge technology; the competitive
environment for our products and services; the potential for
further demobilization or termination of the American Centrifuge
project; risks related to the current demobilization of the
portions of the American Centrifuge project including risks that
the schedule could be delayed and costs could be higher than
expected; the timing, savings and execution of any potential
restructurings; potential strategic transactions, which could be
difficult to implement, disrupt our business or change our business
profile significantly; 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 this and our other filings with the
Securities and Exchange Commission, including our Annual Report on
Form 10-K for the fiscal year ended December 31, 2015 and
subsequent 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/20170120005663/en/
Centrus Energy Corp.Don Hatcher, 301-564-3460
Centrus Energy (AMEX:LEU)
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