Urenco Holders Plan Joint Sale This Year, EON Says

Urenco Ltd. shareholders may combine to sell a majority holding in the nuclear-fuel maker this year, investor EON SE said.

The processor of uranium for atomic reactors is owned by Germany’s two largest utilities, EON and RWE AG, and the governments of the U.K. and the Netherlands. While EON and Britain have said they’d like to sell, this is the first time a joint sale by a group of the investors has been suggested. The company may be valued at about $14 billion, the Financial Times reported last month.

“There is the possibility to divest a majority stake of the company together with the other stakeholders,” EON Chief Financial Officer Marcus Schenck said in an interview in Dusseldorf. The sale process may start this year and be completed in 2014, he said.

The German utilities want to sell out of Urenco after Chancellor Angela Merkel decided to close all the companies’ reactors. For the governments, a sale would raise cash as both implement austerity measures to reduce budget deficits. The Stoke Poges, England-based company, which reported a 23 percent jump in sales to 1.6 billion euros ($2.1 billion) last year, says increasing demand from China and India will offset the impact of European reactor closures.

National Security

A U.K. Treasury official declined to comment beyond a statement last month that the government was considering selling its stake. An official at the Dutch Ministry of Economic Affairs didn’t return phone calls and e-mails seeking comment. RWE declined to comment on the sales process.

Selling a majority of the company would mean addressing the national security concerns involved in processing nuclear material, Schenck said. The U.K. and Dutch governments each own a third of Urenco and the German utilities own the rest.

“We would look for a way to give special rights to the governments regarding security aspects,” Schenck said, pointing to the example of European Aeronautic Defence & Space Co. While that may extend the time it takes to negotiate, EON expects to close a sale next year, he said.

The Urenco sale would be part of a 20 billion-euro disposal program to reduce debt at the Dusseldorf-based power generator. EON expects to get more than 2 billion euros from the sale of its Urenco stake and two regional utilities.

EON shares were little changed at 13.16 euros at the close in Frankfurt trading.

Additional Capital

The sale of EON’s 73 percent stake in regional utility EON Mitte AG to the municipal minority shareholders is on the “home stretch” and will close this year, Schenck said, declining to comment on the valuation of the deal. EON may keep the unit’s sales business, “which makes sense economically,” he said.

Schenck said he sees no need for additional capital in the foreseeable future, while EON will invest 7 billion euros this year instead of the originally planned 6 billion euros.

Acquisitions beyond 100 million euros “are not at the top of the agenda,” he said.

EON’s move to increase its stake in MPX Energia SA to 36 percent and purchase two regional utilities in Turkey show “that we have a certain room for maneuver,” Schenck said.

The company was criticized by some shareholders at last week’s annual general meeting for placing too much emphasis on growth outside Germany.

“We prefer to operate in a growing market which is undersupplied, rather than in a shrinking market that is oversupplied” like Europe, Schenck said.

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