UK decides on Urenco sale

22 April 2013

The British government will go ahead with a process to sell its stake in Urenco, subject to security concerns and the company's complex ownership structure.

As one of only a handful of companies in the world that enriches uranium for use in reactor fuel Urenco commands a 31% share of the global market. From this it derived pre-tax earnings of over €1 billion ($1.3 billion) in 2012. Despite the market shock of prolonged shutdowns in Japan, the company's prospects are boosted by the current period of expansion in nuclear power in which new reactor projects starting at a rate not seen since the mid-1980s.

Explaining the UK government's decision, Business and Energy Minister Michael Fallon said the sale is in line with its "position that assets should be sold where ownership itself does not deliver any policy objective." However, the same statement said: "The government is committed to putting the UK at the forefront of the race to capture the benefits of the domestic and global nuclear market."

Britain has considered the potential sale of Urenco for many years, with this becoming serious in 2009 when worsening national finances prompted then-prime minister Gordon Brown to list it as part of a £16 billion ($24 billion) sale of public assets. Morgan Stanley were brought in to advise on the sale and last year administration of the UK stake was moved from the Department for Energy and Climate Change (DECC) to a special unit in the Department for Business, Innovation and Skills (BIS).

Divestment of the stake will not be a simple matter. Urenco shares are held one-third by the UK government, one-third by the Dutch government and one-third by the German utilities RWE and EOn. The company is regulated by the 1971 Treaty of Almelo to consolidate and commercialise centrifuge enrichment research by the three countries, whose governments still control it through shareholding executives. The Almelo text has since been expanded by the Treaty of Washington, which allowed for expansion in the USA, and the Treaty of Cardiff, which made possible a technology agreement with Areva of France.

Any sale will have to be agreed by all shareholders, as well as the German government, and must also "protect the UK's security and non-proliferation interests," warned Fallon.

Researched and written
by World Nuclear News

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