GE, Hitachi close to Global Laser Exit
Transaction would complete restructuring, allow work on Paducah laser plant
General Electric and Hitachi are close to divesting their 76 percent interest in Global Laser Enrichment, a venture licensed to build and operate a laser nuclear fuel enrichment facility near Wilmington, North Carolina.
A decision could come next month, according to Platts Nuclear News Flashes, which reported a “March decision set on sale or closure of Global Laser Enrichment”.
The trade paper was commenting on an Asahi Shimbun report that electronics giant Hitachi Ltd. "is expected to report a 70 billion yen ($620 million) non-operating loss by the time books are closed for fiscal 2016 at the end of March...
"The deficit is largely attributed to the joint venture GE Hitachi Nuclear Energy Inc. withdrawing from the uranium enrichment project," the Japanese newspaper said.
Friday, Silex Systems Ltd. released an update "to provide clarification on statements made in news reports...regarding Hitachi’s 25 percent shareholding" in Global Laser, the exclusive licensee for the SILEX laser uranium enrichment technology.
With a number of investors in advanced stages of due diligence, Silex said, it continues to work with GE Hitachi on a formal agreement that would result in the sale of GE Hitachi’s stake in Global Laser to Silex and new investors.
The Sydney, Australia-based technology licensor noted the talks with investors are the result of a May 2016 agreement with GE Hitachi giving Silex "an exclusive option over GEH’s 76 percent equity stake in...Global Laser."
Finishing Global Laser Restructuring
The equity stake Silex refers to consists of GE Hitachi's direct stake of 62.5 percent and General Electric Co.'s 13.5 percent direct interest, according to GE Hitachi spokesman Jon Allen.
Hitachi's 40 percent stake in GE Hitachi results in an indirect stake of 25 percent in Global Laser while GE has an indirect and direct stake totaling 51 percent as required by U.S. law. The remaining 24 percent was acquired by Saskatoon, Saskatchewan-based Cameco Corp. for an investment of $123.8 million in June 2008.
In May, GE Hitachi explained it had "informed Cameco and Silex of its desire to reduce its equity interest in Global Laser...following the restructuring of GLE operations announced in 2014."
That restructuring triggered a charge of "about one cent a share" against GE's second quarter 2014 earnings. The industrial conglomerate never put a dollar value on the charge, but Nuclear Intelligence Weekly said it was $194 million. In the third quarter Cameco wrote off its $184 million investment in Global Laser.
Announcing Silex's May agreement, GE Hitachi said "any sale or transfer of GEH’s interest in GLE would be subject to government review and approval."
Friday Allen said "the Silex System's statement is consistent with GEH’s view of the status of the GLE restructuring effort."
Gord Struther, spokesman for uranium miner Cameco, emailed: "We have nothing to add" to the Silex news release.
In January, the May agreement was extended to March 31 – the probable basis for Platts' reference to a decision next month.
Ahead, a $1 billion investment
"Should the (Global Laser) restructure continue constructively and more time is needed, Silex will seek a further extension of the...arrangements with GEH through the second quarter of 2017," the company said Friday.
The January extension followed Global Laser's November agreement to purchase some 300,000 metric tons of tails from the U.S. Department of Energy's inventory of depleted uranium hexafluoride (DUF6) stockpiled in Paducah, Kentucky.
The tails were left over from 60 years of operations at the Paducah Gaseous Diffusion Plant, a government-owned uranium enrichment facility located near the confluence of the Tennessee and Ohio Rivers in western Kentucky.
Completion of this agreement after three years of negotiations "is an important step forward for (Global Laser),” chief executive Bob Crate said in a November statement.
“Securing the right to acquire depleted uranium...is a key factor in GLE’s plans" to construct and operate a laser enrichment facility using the SILEX technology.
A decision on proceeding with this investment – put at $1 billion by Kentucky officials – awaits completion of the Global Laser restructuring, Struther noted.
In September 2012, Global Laser received a U.S. Nuclear Regulatory Commission license to build and operate what was what was expected to be the first commercial laser uranium enrichment facility. Land was cleared for the plant on GE's 1,600 acre campus in Castle Hayne, north of Wilmington.
Work on the plans was suspended when the decision was made to restructure Global Laser operations in 2014.
A laser enrichment test loop built on the campus in 2009 is still operated as part of Global Laser’s commercialization program.