BETHESDA, Md.--(BUSINESS WIRE)--Centrus Energy Corp. (NYSE MKT: LEU) (the “Company”) announced the expiration and final results of 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 liquidation amount of 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.
According to information provided by the exchange agent and information agent for the Exchange Offer and Consent Solicitation, as of 11:59 p.m., New York City time, on February 9, 2017 (the "Expiration Date"), the Company had received tenders from holders of $204,944,468 in aggregate principal amount of the Outstanding Notes, representing approximately 87.4% of the total outstanding principal amount of the Outstanding Notes.
All holders who tendered prior to the Expiration Date will receive $362.36 principal amount of New Notes, $509.75 liquidation amount of Preferred Stock and a cash payment of $127.89 in exchange for each $1,000 principal amount of Outstanding Notes validly tendered and accepted for exchange by us pursuant to the Exchange Offer. For each $1,000 principal amount of Outstanding Notes validly tendered on or prior to 11:59 p.m., New York City time, on February 2, 2017 (the “Early Tender Date”) and not validly withdrawn, holders will receive an additional Early Tender Premium equal to a cash payment of $7.50.
All conditions to the Exchange Offer and Consent Solicitation have been satisfied or waived, including the receipt of valid consents from the holders of a majority of the outstanding principal amount of the Outstanding Notes to the proposed amendments to the indenture for the Outstanding Notes. The Exchange Offer was conditioned upon the receipt of valid tenders of Outstanding Notes, not withdrawn, of at least $211.12 million aggregate principal amount of Outstanding Notes on or before the Expiration Date (the “Minimum Participation Condition”), but the Minimum Participation condition has been waived to $199.39 million with the consent of noteholders party to the Support Agreements (as defined Offering Memorandum dated January 5, 2017, as amended (the “Offering Memorandum”)) holding, in the aggregate, no less than a majority of the Outstanding Notes held by noteholders party to the Support Agreements, as described in the Offering Memorandum. The settlement date is expected to be on February 14, 2017. The Company expects to issue an aggregate of $74,263,580 principal amount of New Notes, $104,470,357 million liquidation preference of Preferred Stock and pay approximately $27,560,110 million in cash in satisfaction to the tendered Outstanding Notes.
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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.
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.