Facing continued quarterly losses, Bethesda enriched uranium supplier USEC — one of Montgomery County’s largest companies by revenue — plans to file for Chapter 11 bankruptcy protection early next year, executives said on Monday.
In the past 11 quarters, USEC has reported net income only once. In the first nine months this year, losses did narrow to $87.2 million from $116.3 million in the same period of 2012.
The $44 million loss in the most recent quarter was largely due to non-production expenses related to ceasing enrichment work at a plant in Paducah, Ky., said John K. Welch, USEC president and chief executive officer, in a recent conference call. “We are preparing the facility for return” to the U.S. Department of Energy, he said.
USEC is also building a $350 million uranium enrichment plant in Ohio that is largely funded by the federal government. But “significant challenges” remain for continued funding to complete that plant and commercialize the American Centrifuge technology, Welch said.
“We continue to evaluate our options concerning the project and could make a decision to demobilize or terminate the project in the near term,” Welch said. “Such actions could have significant adverse impacts on the company.”
USEC expects to file for bankruptcy in a Delaware court by March 31, but executives do not expect that to affect operations, suppliers, customers and research programs. Chapter 11 bankruptcy allows a company to continue to operate as it sheds debt and usually reorganizes finances through a court-approved plan.
In particular, the 84 employees at the Bethesda headquarters will not be affected, said Paul Jacobson, a company spokesman. USEC had 1,770 total employees as of Jan. 1, about 100 fewer than a year earlier, according to its annual report.
USEC had $1.9 billion in revenue last year, up from $1.7 billion in 2011. Lockheed Martin, Marriott International, Host Hotels & Resorts and Discovery Communications are among the few companies based in Montgomery County with more annual revenue.
USEC agreed with some bondholders to replace about $530 million in convertible notes scheduled to mature in October 2014 with $200 million in new debt. Under a restructuring plan, bondholders will get 79 percent of the new equity as common stock. USEC’s current board of directors will oversee the restructuring process until the effective date of the plan, when a new board will be named.
Shares of USEC’s stock fell 57 percent by late Monday afternoon to $3.79. The company’s stock price has been on a downward path since July 29 when it went above $29.