Japanese connection strengthens Uranium One

first_imgUranium One has entered into a subscription agreement with a corporation formed by The Tokyo Electric Power Co (TEPCO), Toshiba Corp and The Japan Bank for International Cooperation providing for the private placement of Uranium One common shares, for gross proceeds of some C$270 million. Concurrently with the execution of the subscription agreement, Uranium One has also entered into a long-term offtake agreement and a strategic relationship agreement with the Japanese consortium, both of which will become effective upon closing of the private placement. Uranium One is one of the world’s largest publicly traded uranium producers, with a globally diversified portfolio of assets located in Kazakhstan, the US, South Africa and Australia.The offtake agreement provides the consortium with an option to purchase, on industry-standard terms, up to 20% of Uranium One’s available production from assets in respect of which Uranium One has the marketing rights. Under the strategic relationship agreement, the Japanese consortium has the right to appoint two directors to the Uranium One board and a right of first opportunity to invest in any uranium mining asset or project whichUranium One may in its discretion decide to make available to third parties.This agreement also contains a standstill provision under which the consortium has agreed, subject to certain exceptions, not to acquire without Uranium One’s prior approval more than 19.95% of Uranium One’s issued common shares. The Japanese consortium has also agreed not to dispose of any significant portion of its Uranium One shares except by way of a broad market distribution or pursuant to certain other limited exceptions.The rights granted under both the offtake agreement and the strategic partnership agreement are generally subject to the consortium continuing to meet certain equity ownership thresholds. Upon closing of the private placement,the consortium will have a 19.95% equity stake in Uranium One.Jean Nortier, President and Chief Executive Officer of Uranium One commented: “Uranium One is very pleased to partner with such highly respected leaders in the global nuclear industry. We will benefit from the consortium’s knowledge and expertise in the nuclear industry, from its high level relationships in Kazakhstan and from its significant financial resources. The proceeds from the private placement, combined with Uranium One’s consolidated cash balance of approximately $185 million at the end of January, will result in a solid balance sheet to fund our growth and development plans.”TEPCO is the largest electric utility in Japan and provides power to the Tokyo Metropolitan Area. It has an electricity generating capacity of over 62 GW, approximately 28% of which is from nuclear power. Toshiba is a diversified manufacturer of electric and electronic products and is involved in a broad range of power systems businesses around the world. It has a 67% ownership interest in Westinghouse Electric, whose technology today provides the technological basis for approximately half of the world’s operating nuclear power plants. The Toshiba Group hasindustry-leading capabilities in both boiling water reactor (BWR) and pressurised water reactor (PWR) nuclear power plants. The Japan Bank for International Cooperation is the international arm of the Japan Finance Corporation. JBIC contributes to the sound development of the Japanese and international economy in the three fields of: (i) promoting overseas development and acquisition of strategically important natural resources to Japan; (ii) maintaining and improving the international competitiveness of Japanese industries; and (iii) responding to disruptions in the financial order of the international economy.last_img

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