ML20078G207

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Forwards Schedule Showing Vendor Consolidated Balance Sheet as of 660228 & Consolidated Balance Sheet Projected for 660331.Addl Line of Credit of $1,000,000 Received from Mfg & Traders Trust Co.Ltr Encl
ML20078G207
Person / Time
Site: West Valley Demonstration Project
Issue date: 03/22/1966
From: Runion T
NUCLEAR FUEL SERVICES, INC.
To: Mcbride J
US ATOMIC ENERGY COMMISSION (AEC)
Shared Package
ML20078G199 List:
References
FOIA-83-354 NUDOCS 8310120009
Download: ML20078G207 (5)
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r. John A. McBride, Director Division of Materials Licensing U.S. Atomic Energy Commission 4915 St. Elmo Avenue Bethesda, Maryland

Subject:

Information Subsequent to Cons truc tion Permit, Submission No. 5

Dear Dr. McBride:

On February 25, 1966, NFS signed Submission No. 5 requesting amendment of the construction permit so that the latest date for completion would be June 30, 1966. While NFS believed that cons truction would be completed prior to March 31, 1966, nevertheless, as a matter of precaution, this application was filed. It now appears that a Provisional Operating License will not be issued until af ter March 31, 1966, and therefore action should be taken upon the application for extension of time for completion.

In Submission No. 5, NFS indicated that supplementary financial arrangements were being made to assure the availability of any funds required for the facility during the period from March 31 to June 30, 1966 even in the absence of revenue from the operations of the themical

( plant. Applicant stated that it would notify AEC of such additional arrangements prior to March 31, 1966. This letter is intended to serve as such notification.

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l Attached hereto is the schedule showing the NFS Consolidated l Balance Sheet as of February 28, 1966, and the Consolidated Balance Sheet l as projected for March 31, 1966, which remains as set forth in Annex A of Submission No. 5. You will note that as of February 28, 1966, the net current assets of NFS are $220,000.

l At the Directors' Meeting of NFS which took place in New York l

City on March 9,1956, and which was attended by those officers of W. R.

l Grace and Co. and American Machine & Foundry Company who are directors of l NFS, the officers of NFS were authorized to arrange for additional bank l credit amounting to $1,000,000 to cover operating expenses beyond March 31, 1

1966, to the extent that such credit was required. NFS accordingly communicated with the Manufacturers and Traders Trust Company, Buffalo, N.Y. and has received from said bank an additional line of credit of $1 million as set forth in the letter from the said bank, a copy of which is attached to this letter.

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.. c As stated in previous submissions, the operating expenses of the-West Valley plant on a standby basis do not exceed $300,000 per menth and a substantial cash flow is generated from the Erwin operations of NFS. It is therefore apparent' that this additional line of credit will be more than adequate to insure the availability of required funds for the period beyond June 30, 1966 even in the absence of income from West Valley operations.

Very truly yours,

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T. C. Runion President TCR/crp Attachments 4

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ASSETS

, Actual Projected ,,.

_Feb. 28, 1966 Mar. 31, 1966 Current Assets: -

Cash Receivables - Net *$ 251 $ 979 -

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1,125 967 Inventories .

603 1,207 Cther Current Assets 742 Total Current Assets 562 . .

2,721 3,715 rd Assets (Note 1) 22,069 22,638 Less: Reserve for Depreciation. 1,212 1,243 Fixed Assets - Nec 20,857 21,395 Cthtr Assets:

Preoperational Costs - Reprocessing Plant 3,123 '

3,401 Cther /

84 80 '

Total Other Asscts 3,207 3,481

$26,785 $28,591 t

LIABILITIES & STOCKHOLDERS' EQUITY l

! Currsnt Liabilities: '

m Bank Loans Payable - Current (Note 2) $ 1,211 . $ 1,358 iccounts Payable 958 1,200 (OtherCurrentLiabilities - '

332 290 Total Current Liabilities 2,501 2,848 Defstred Taxes on Income 368 381 Deferred Credit - Research Grant (Note 3) 1,636 1,818 Long-Term Debt - Banks Loans (Note 2) 10,292 11,545 l

Total Liabilities 14,797 16,592 Stsckholders' Equity:

CIptial Stock - Iss.ued (Note 4) 11,105 Paid-In Surplus (Note S) 11,105 500 Er.rned Surplus - 500 383 394

Total Equity 11,988 1

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,V. ' ,% i J 1,999 .

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Notes to the Balance Sheet i Not31 - Fixed assets do not include $8,500,000 in land and facilities at West Valley, New York leased to NFS by A3DA. The detail of NFS-owned facilities by location is as follows*

.lt Projected Actual ,

($000) Feb. 28, 1966 Mar.'31, 1966 >

West Valley, New York: 4'N Spent Fuel Processing Plant $18,664 $19,208

. Other 180 180 i Total West Valley, N. Y. 18,844 19,388 ,

Erwin, Tennessee: 3,225 3,250 (Noto 2.- The availability of funds under the bank loa'n agreement was extended Total $22,069 '$22,638 to March 31, 1966, from December 31, 1965. One-twentieth ($597,500) of the amount outstanding as of December 31, 1965, was repaid to the banks on January 1, 1966. The balance of the loan will be repaid in ,

nineteen equal semi-annual insta11mentr. beginning July 1, 1966. /

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l Not3 3 - ESADA is contributing $2,000,000 toward the research and development costs associated with the reprocessing plant. Two of the eleven equal quarterly payments of $181,818.18 remain to be received in 1966, one '

on March 31 and the final one on June 30. The total contribution will be amortized against the cost of the plant over its depreciable life. -

Noto,4 - In accordance with the stockholders' agreement, W. R. Grace & Co. and American Machine and Foundry Company have made the following contri(utions in return for eighty (80) and twenty (20) percent ownership respectively:

($000) Grace (807.) AMF (207.) Total

! Cash $6,000 $2,000 $8,000 Existing Facilities - at book value 2.466 639 _ 3,105 t

$8,466

$2.639 $11.105 Not3 5 - Funds have been contributed by the stockholders for use in expanding the facilities at.the Erwin, Tennessee plant.

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Manufacturers and Traders Trust Company Buffalo, N.Y.14210 ouo6cv . ....

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- Mr. Kenneth A. Lawder, Treasurer d USAEC C, '

W.R. Grace 8e Company , T g 1966

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7 Hanover Square 9- I t natulent New York, New York 10005 uut tuim 4 sectu CEB1

Dear Ken:

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( This will confirm my telephone conversation with you yesterday, and advise you that our Executive Committee has authorized an unsecured

.line of credit for Nuclear Fuel Services, Inc., in the amount of $1 million, with the understanding that it will be repaid on or before April l,1967. As discussed at our meeting here in the bank, interest rate on this will be 6% and, of course, there will be no commitment

fee involved. ,/.

I am having our attorney draw up a letter of consent to this borrowing, as per section 5 of our term loan agreement dated as of July 1,1963, . . .

with a copy to Morgan Guaranty, who have assured me they would f-interpose no objection and would write a similar letter to you. ~ ' '

I am rather pleased that we will take the entire $1 million of this open credit. Morgan Guaranty feels that $81/2 million is as far as they'

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want to go at this time.

! I have also talked to Oliver Townsend and Charlie Runion. Oliver reconfirmed what he had told Runion that ASDA would interpose no -

objection to this borrowing and would so advise NFS by letter. I l then called Runion advising him of our meeting with you and our subsequent commitment to NFS and suggested that he contact Townsend to get the appropriate consents in the works.

l Would you advise if this is the type of commitment 1ctter that you wish l for purposes of extending your AEC construction permit.

Very since 61y, ,

l hf Dudley 4. Irw' }y DMI/sd 4

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