BETHESDA, Md.--(BUSINESS WIRE)--Centrus Energy Corp. (NYSE MKT:LEU) (the “Company”) announced today an amendment to 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 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, as amended (the “Exchange Offer Memorandum”). The amendment provides for an extension of the expiration of the Exchange Offer to 11:59 p.m., New York City time, on February 9, 2017 (such time and date, as the same may be extended, the “Expiration Date”).
The following table sets forth the principal amount of Outstanding Notes validly tendered and not validly withdrawn as of 5:00 p.m., New York City time, on February 2, 2017.
Outstanding Notes to be Exchanged
Principal Amount Outstanding as of January 5, 2017
Principal Amount Tendered
|8.0% PIK Toggle Notes due 2019/2024||15643UAA2||$234,574,504||$179,968,160|
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Outstanding Notes and related consents tendered before the Withdrawal Deadline remain tendered and may not be withdrawn or revoked, except in certain limited circumstances where additional withdrawal rights are required by law.
The Exchange Offer is conditioned upon the receipt of valid tenders of Outstanding Notes, not withdrawn, of at least $211.12 million aggregate principal amount of Outstanding Notes on or before the Expiration Date (the “Minimum Participation Condition”) and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 5:00 p.m., New York City time, on February 2, 2017, 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 Exchange Offer Memorandum, our 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.
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.
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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.
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).
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.