NUKEM Gmbh is one of the world’s key traders of uranium and uranium-related products.
|Offices||Alzenau, Germany (Headquarters, NUKEM Gmbh)
Connecticut, US (subsidiary, NUKEM Inc.)
|Activity||trading of uranium and uranium-related products|
|2013 forecast sales||9 to 11 million lbs U3O8 and about 500,000 SWU|
In January 2013, we completed the acquisition of NUKEM. On closing, we paid €107 million ($140 million (US)) to Advent International and other shareholders and assumed its net debt of about €84 million ($111 million (US)).
Under the earn-out provisions in the agreement, we expect to pay Advent a share of NUKEM’s 2012 earnings. An additional payment may be required in 2015 depending on results achieved in 2013 and 2014.
NUKEM’s business model
NUKEM’s purchase contracts are with longstanding supply partners and its sales contracts are with blue-chip utilities which have strong credit ratings.
Planning For the Future
In 2013, we expect NUKEM to deliver approximately 9 to 11 million pounds of uranium and about 500,000 SWU.
Managing Our Risks
NUKEM manages the risks associated with trading and brokering nuclear fuels and services. It participates in the uranium spot market making purchases to place material in higher price contracts. There are risks associated with these spot market purchases including the risk of losses. NUKEM is also subject to counterparty risk of suppliers not meeting their delivery commitments and purchasers not paying for the product delivered. If a counterparty defaults on a payment or other obligation or becomes insolvent, this could significantly affect NUKEM’s contribution to our earnings, cash flows, financial condition or results of operations.