UK to sell stake in Urenco

23 April 2013

The British government said on April 22 it would sell some or all of its 33% stake in Urenco, the world's second-largest vendor of nuclear fuel. Three countries hold equal stakes in the security-sensitive uranium enrichment concern - Britain, the Netherlands and Germany, whose share is held by utilities E.ON and RWE.

Urenco is estimated to be worth up to 10 billion euros ($13 billion) and several buyers have been reported to be ready to bid for a stake. These include French nuclear group Areva, Canadian uranium miner Cameco Corp, reactor builder Westinghouse's Japanese parent Toshiba, and the Canada Pension Plan Investment Board (CPPIB).

Germany, Britain and the Netherlands, which set up Urenco more than 40 years ago, have a duty to ensure secret technology that could be used to make an atomic bomb does not fall into the wrong hands.

"The decision to proceed towards a sale comes after the government secured agreement from its Dutch and German partners," Britain's business ministry said in a statement.

The ministry added that the scale and timing of any sale had not yet been determined. "Any sale will only be concluded if the government is satisfied that the UK's security and non-proliferation interests can be protected and that value for money is achieved for the UK taxpayer."

Buyers will have to be approved by the three owners, as stipulated by the Almelo treaty that governs the firm.

"We are in talks with the British and German partners, but we don't have news on that subject yet," a Dutch economics ministry spokeswoman said. E.ON and RWE declined to comment.

With a market share of 31%, Urenco is the world's second-largest uranium enrichment firm after Russia's Tenex. Areva and U.S. USEC are also major nuclear fuel producers.

Urenco's order book has been hit by the 2011 Fukushima reactor disaster. At the end of 2012, orders had fallen by 2 billion euros to 18 billion.

Urenco reported 2012 revenue up 23% at 1.6 billion euros ($2 billion), core EBITDA earnings up 29% to 1.01 billion euros and net income up 12% at 402 million.