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Stockholders to vote on USEC reorganization

BY LAUREN P. DUNCAN lduncan@paducahsun.com

The first hearing in United States Enrichment Corporation's bankruptcy case moved the company one step closer to reorganizing and coming out of Chapter 11 protection in September.

Judge Christopher S. Sontchi with the United States Bankruptcy Court for the District of Delaware ordered USEC to begin taking votes from holders of convertible notes, which are bonds that can be converted into shares, and two preferred shareholders to approve its plan for reorganization.

The company submitted a plan of reorganization when it filed for Chapter 11 bankruptcy protection on March 5.

According to information from the uranium company, the plan is supported by 66 percent of the holders of the corporation's $530 million of notes outstanding. 

Holders of USEC's common equity shares, however, will not be able to vote.

Ballots will be sent to shareholders, who will have until Aug. 11 to vote. The reorganization plan will then be reviewed at a Sept. 5 hearing.

"We have made steady progress in recent months to restructure USEC, and we anticipate emerging from Chapter 11 protection with an improved balance sheet," said John K. Welch, USEC president and chief executive officer.

Welch also stated Paducah's USEC employees have "done an outstanding job of preparing the Paducah Gaseous Diffusion Plant for de-lease and return to the U.S. Department of Energy in October."

According to a report by Bloomberg, Judge Sontchi called USEC's reorganization plan "very thorough, well done and precise."

The company is working to establish its American Centrifuge Plant in Ohio. USEC announced in May 2013 that it would be closing the Paducah plant after the Department of Energy did not approve an extension on its uranium enrichment operations. Since then, the plant has had seven rounds of layoffs.

Georgann Lookofsky, public affairs manager at Paducah's plant, said Monday's decision to take shareholder votes will not affect local retirement pensions.

USEC's two preferred shareholders that will vote on the reorganization plan, and also each take on $20 million in debt if the plan is approved, are Toshiba Corp. and Babcock & Wilcox Co.

Contact Lauren Duncan, Paducah Sun staff writer, at 270-575-8692 or follow @laurenpduncan on Twitter.

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