USEC Inc. (NYSE:USU) today announced that it plans to initiate "reduce the planned escalation of project construction and machine manufacturing activities" at its uranium enrichment plant in Piketon, Ohio. The company cited delays in securing a government loan guarantee as the culprit.
USEC applied for the loan under the terms of the Energy Policy Act of2005, and the outgoing Bush administration failed to select projectsfor loan guarantees before leaving office. The company said it is"strongly encouraged" by plans for the Obama administration to"accelerate" the loan guarantee approvals. The company has invested$1.2 billion in the new plant is seeking a guarantee for a loan of $2billion. Under the terms of the Energy Policy Act, the funds areavailable until the end of September 2009.
USEC did not specify the impact on the project schedule other than tosay that as more information on the loan becomes available, the company"will be better able to quantify changes to cost and schedule." USECalso plans to reduce overhead by reducing cash bonuses for 2008,freezing executive pay, limiting merit increases and calling a halt tonew hiring.
Shares of USEC are up slightly on the news.
Paul Ausick
February 5, 2009
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