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Financial disaster of USEC threatens viability of USA nuclear industry

financial-disaster-1USEC’s flirtation with a non-nuclear Apocalypse has profound implications for the safe completion of power-down at Paducah, for the long-term cleanup of the contaminated sites that USEC will leave behind, for the well-being of a region that came to depend on the company’s draw of unproductive federal spending, and for the viability of the U.S. nuclear industry as a whole.

Uranium Titan Tumbles  EcoWatch July 12, 2013  By Geoffrey Sea High drama hits the world of the former U.S. Enrichment Corporation as a shareholder rebellion drubs the company stock price, restructuring and bankruptcy rumors swirl, safety issues delay USEC’s departure from Kentucky, a “left-right” anti-USEC coalition of Non-Governmental Organizations emerges and charges of USEC’s direct involvement in illegality proliferate.

USEC used to be a world giant in the supply of nuclear fuel. Once wielding monopoly power over the domestic supply and international pricing of enriched uranium, its motto touts “A Global Energy Company,” even as USEC struggles with the expense of closing its last production facility in the non-metropolis of Paducah, Kentucky. (Metropolis is over the river in Illinois.)

But in a spectacular sell-off signaling bizarre irregularities in the way the company has been managed and subsidized, USEC Inc.’s stock price has tumbled in a pattern known to market analysts as a “falling knife.” On the Friday after July 4, normally a sleepy trading day, the rush to sell USEC stock caused $2 gaps between ask and bid prices, ending with a 40 percent drop in value for the day. After double-digit percentage share-price declines at enormous volume on July 3, July 5 and July 8, (thirty times average volume on July 8), the total market valuation of the company is now about $16 million, ranking it as Lilliputian.

USEC’s bonds, which come due for payment in 2014, if not sooner, fell to about twenty cents on the dollar. The company’s common shareholders, including many past and current employees, have lost 99 percent of value since 2007, 80 percent of value since the start of 2013 and 67 percent of value since June 24, when the Paducah City Council and the McCracken County Fiscal Court met in joint session to cope with USEC’s abandonment of that community…..

USEC’s flirtation with a non-nuclear Apocalypse has profound implications for the safe completion of power-down at Paducah, for the long-term cleanup of the contaminated sites that USEC will leave behind, for the well-being of a region that came to depend on the company’s draw of unproductive federal spending, and for the viability of the U.S. nuclear industry as a whole.

The cliff-diving exhibition of USEC stock is pushed by fears of an impending bankruptcy filing or a stock-diluting debt-for-equity swap, two de-listing warnings from the New York Stock Exchange (NYSE), shock and horror over a reverse stock split at a monstrous ratio of 25-to-1 and growing realization that USEC stands as much chance of swinging a needed federal loan guarantee as George Zimmerman does of being voted Mister American Suave.

Even Frank Lewis of Ohio’s Portsmouth Daily Times, who would report a nuclear disaster as a good-news opportunity for USEC, wrote last week that in announcing new loan guarantees, the Department of Energy is sullenly silent about USEC. No shit, Sherlock, the company is going broke.

At the pre-reverse split valuation rates in effect until July 1, USEC stock is now selling for thirteen cents per share. You can’t buy a doughnut-hole for that, but if you could, it might have more spin and enrichment potential than a USEC uranium centrifuge.

Yet even after the panicked sell-off of USEC stock, on the evening of July 10, the inestimable members of the U.S. House of Representatives, led by the very same characters who lambasted the Obama administration for its risky loan guarantee to the Solyndra Corporation, voted by nearly a three-to-one margin to make another $48 million of federal funds available to the USEC “centrifuge” venture in Ohio, at risk levels that would make a Carnival Cruise through the Bay of Beirut look like a safe bet by comparison.

So what is going on here?……….. http://ecowatch.com/2013/uranium-titan-tumbles/

July 16, 2013 - Posted by | business and costs, USA

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