Bankruptcy court says USEC can seek creditor vote on reorganization plan

|By:, SA News Editor

USEC (USU -22.1%) wins bankruptcy court approval to seek creditor votes on a plan to hand control to noteholders that would swap convertible notes and all of USEC’s preferred and common shares for ~$240M in new debt and new common stock.

Noteholders would receive $200M of the new debt and 79 % of the new equity, with preferred shareholders Toshiba (TOSBF) and Babcock & Wilcox (BWC) each receiving ~$20M of the new debt and ~8% of the new stock; existing shareholders would get just 5% of USEC’s new shares under the plan.

Shares rallied strongly last week on receiving $2.5M in new funding from the Energy Department, but the market has corrected today and last Thursday after the apparent overreaction.