The Babcock & Wilcox Company (B&W) (NYSE:BWC), through its affiliate Babcock & Wilcox Investment Company, announced today that it has made a $37.5 million investment in USEC Inc. (NYSE: USU). This is the first phase of its previously announced definitive agreement to make a $100 million strategic investment in USEC. In connection with the investment, Michael S. Taff, Senior Vice President and Chief Financial Officer of B&W, has been elected to USEC’s Board of Directors. In May 2010, USEC announced that Toshiba Corporation and Babcock & Wilcox Investment Company signed a definitive agreement to make a strategic investment totaling $200 million in USEC over three phases. The investment also initiates the formation of American Centrifuge Manufacturing (ACM), a joint venture between B&W and USEC. ACM will provide integrated manufacturing and assembly of centrifuge machines for USEC’s American Centrifuge Plant. “The completion of the first phase of this investment demonstrates B&W’s continued commitment to broadening its nuclear energy technology and service portfolio,” said Brandon Bethards, President and Chief Executive Officer of B&W. “In addition, we consider this investment as an opportunity to allow us to enhance our international business relationship with Toshiba, a strong nuclear products and services provider. As a leader in the nuclear power industry, we are pleased to participate in an innovative energy project like the American Centrifuge Plant, which will supply the nuclear industry with a reliable fuel supply for decades to come.” The second phase of the strategic investment, which will be $25 million, will occur when, among other things, USEC secures a conditional commitment on a $2 billion loan guarantee from the U.S. Department of Energy (DOE). The balance of the investment, which will be $37.5 million, is conditioned, among other things, on closing the loan under DOE’s loan guarantee program for the American Centrifuge Plant and USEC shareholder approval of certain matters.
The American Centrifuge Project is based on the use of highly efficient centrifuges to produce uranium fuel utilizing skilled workers primarily in Tennessee and Ohio.ACM is headquartered at USEC’s American Centrifuge Technology & Manufacturing Center in Oak Ridge, Tenn., which has been operated by Babcock & Wilcox Technical Services Clinch River, LLC to manufacture components for USEC since 2007. ACM will manage all aspects of manufacturing USEC’s AC100 series centrifuge machines, including the integration of all suppliers and subcontractors, as well as delivery and assembly of production unit centrifuges at the American Centrifuge Plant in Piketon, Ohio. The joint venture expects to provide spare parts and other maintenance support services for centrifuge machines at the American Centrifuge Plant under a long-term service agreement. About B&W Headquartered in Charlotte, N.C., The Babcock & Wilcox Company is a leader in clean energy technology and services, primarily for the nuclear, fossil and renewable power markets, as well as a premier advanced technology and mission critical defense contractor. B&W has locations worldwide and employs approximately 13,000 people, in addition to approximately 10,000 joint venture employees. Learn more at www.babcock.com . Forward Looking Statements B&W cautions that this release contains forward-looking statements, including, without limitation, statements relating to our investment in USEC, the scope of the ACM joint venture and our belief regarding the impact that the ACM joint venture will have on the American Centrifuge Plant. These forward-looking statements are based on current management expectations and involve a number of risks and uncertainties, including, among other things, difficulties in the operation of the ACM joint venture and adverse changes in the operation or financial condition of the American Centrifuge Plant. If one or more of these or other risks materialize, actual results may vary materially from those expected. For a more complete discussion of these and other risk factors, please see B&W’s filings with the Securities and Exchange Commission, including its registration statement on Form 10, as amended. B&W cautions not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and undertakes no obligation to update or revise any forward-looking statement, except to the extent required by applicable law.