USEC listing difficulties might result in default under notes, loan

By Angela McDaniels

Tacoma, Wash., Aug. 6 - USEC Inc. is facing a default under its 3% convertible notes due Oct. 1, 2014 and revolving credit facility if it cannot maintain compliance with the New York Stock Exchange's continued listing criteria, according to the company's 10-Q report for the second quarter filed with the Securities and Exchange Commission.

If the company's shares are delisted, the noteholders can put the $530 million convertibles back at par for cash. USEC said that if that happens, it does not have enough cash to repurchase the notes. Such a failure would be an event of default.

In addition, the delisting of the shares would be an event of default under USEC's $110 million revolver due Sept. 30, 2013.

As previously reported, the company is discussing alternatives for a possible restructuring of its balance sheet with its advisers and some stakeholders.

The company said that it expects to have enough liquidity to meet its obligations for at least 12 months.

Listing difficulties

USEC did a reverse stock split on July 1 to keep its share price above $1.00, the minimum share price for continued listing.

The company received notice on April 30 that it was out of compliance with the requirement that its average market capitalization be $50 million or more over a consecutive 30-trading-day period during which its total stockholders' equity is less than $50 million. USEC submitted a plan to regain compliance, and its stock will remain listed during the 18-month cure period that began Aug.1, subject to its compliance with other NYSE continued listing standards and periodic review by the NSYE of its progress on the plan.

The market capitalization plan includes the successful completion of the company's American Centrifuge plant development milestones and the successful execution of its Russian supply agreement and its potential balance sheet restructuring.

In addition, USEC's stock would be subject to immediate suspension and delisting if the company's average market capitalization is less than $15 million over a consecutive 30 trading-day period. The company said that its market capitalization fell below $15 million for several days during July.

USEC is a Bethesda, Md.-based supplier of nuclear fuel and advanced technology solutions.

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