ML20236F959
| ML20236F959 | |
| Person / Time | |
|---|---|
| Site: | Portsmouth Gaseous Diffusion Plant, Paducah Gaseous Diffusion Plant |
| Issue date: | 05/01/1998 |
| From: | Rifakes G UNITED STATES ENRICHMENT CORP. (USEC) |
| To: | Paperiello C NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM), NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS) |
| Shared Package | |
| ML20036E497 | List: |
| References | |
| GDP-98-0091, GDP-98-91, NUDOCS 9807060034 | |
| Download: ML20236F959 (7) | |
Text
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USEC j
A Global Energy Company GEORGE P. RIFAKES Dir: (301) 664-3301 EXECUTIVE VicE PRESIDENT, OPERATsONS Fax: (301) 664-3108 May 1,1998 GDP 98-0091 Dr. Carl J. Paperiello.
Director, Office of Nuclear Material Safety and Safeguards Attention: Document Control Desk U.S. Nuclear Regulatory Commission Washington, D.C. 20555-0001 Paducah Gaseous Diffusion Plant (PGDP)
Portsmouth Gaseous Diffusion Plant (PORTS)
Docket Nos. 70-7001 & 70-7002 Request for NRC Consent to Transfer the USEC Certificates of Compliance Under1 he Initial Public Offering (IPO) Option INFORMATION TRANSMITTED HEREWITH IS PROTECTED FROM PUBLIC DISCLOSURE AS CONFIDENTIAL COMMERCIAL OR FINANCIAL INFORMATION s
AND/OR TRADE SECRETS PURSUANT TO 10 C.F.R. 2.790 AND 9.17(A)(4)
Dear Dr.Paperiello:
Pursuant to the Energy Policy Act of 1992 and the USEC Privatization Act, the currer,t government owned corporation, United States Enrichment Corporation (USEC-Government ) Bond of Directors has authorized the initiation of the privatization of USEC-Government. The privatization of USEC-Government will be undertaken through a dual path process, simultaneous:y pursuing a f
merger and acquisition (M&A) transaction with a third party and an Initial Public Offedng (IPO).
The USEC-Government Board of Directors, with the approval of the Secretary of the Treasuiy, will
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select the method ofprivatization that best meets the criteria for privatization set forth in the Energy Policy Act of 1992 and the USEC Privatization Act.
ffp' On March 13,1998 USEC-Government submitted a preliminary request for Nuclear Regulatory h
Commission (NRC) review of the proposed privatization transaction to enable the NRC to begin its review process and facilitate the NRC's ability to support the government's schedule for nrivatization (~ Reference 1).
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. Dr. Carl J. Paperiello May 1,1998 GDP 98-0091, Page 2 l
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In accordance with the 10 CFR { 76.65, USEC-Govemment is now submitting the enclosed request for consent to transfer the NRC Certificates of Compliance Nos. GDP-1 and GDP-2 for the Gaseous l
Diffusion Plants (GDPs) located in Paducah, Kentucky and Portsmouth, Ohio in connection with the privatization of USEC-Govemment through an IPO. The enclosed request for consent supplements the information provided to the NRC in Reference I to: (1) reflect USEC-Government's planned corporate structure (particularly the formation of a holding company structure); and (2) provide additional detailed.information in accordance with NRC Information Notice 89-25, Rev.1 L
. (December 7,1994) and the NRC's draft Standard Review Plan for Issuance or Transfer of the GDP
. Certificates. As we have discussed previously with the NRC, the materials in support of a transfer
- in connection with the M&A process will be provided separately in accordance with the privatization schedule.
All of the materials submitted are intended to reflect the anticipated structure of the privatized
. USEC-Government upon completion of an IPO transaction, in the event that an IPO is ' elected by s
~ the USEC-Government Board of Directors and approved by the Secretary of the Treasury. The creation of a ' state chartered corporation is required by the USEC Privatization Act in order to accomplish the privatization of USEC-Government. The IPO privatization transaction will involve
~ he reorganization of USEC-Government into a company organized under the laws of the State of t
Delaware, named the United States Enrichment Corporation (or USEC, termed as "USEC-Private" for the purposes of this submittal to differentiate it from."USEC-Govemment"). In connection with
.the privatization, a new holding company, "USEC, Inc.," will also be created and will also be organized under the laws of the State of Delaware. USEC-Private will be one of two wholly-owned subsidiaries of USEC, Inc. The other wholly-owned subsidiary will be "USEC Services
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Corporation," also organized under Delaware law. The GDP certificates will be transferred to
'USEC-Private and it will be responsible for the operation of the GDPs under the terms of the
, existing Lease Agreement with the Department of Energy (DOE). Furthermore, all of the customers, contracts and assets at the GDPs owned by USEC-Government will be transferred to USEC-Private, as well as the responsibility for complying with all pertinent NRC requirements and commitments.
This-includes the operating contract with Lockheed Martin Utility Services. USEC Services Corporation will provide USEC-Private with certain personnel and support services in connection
- with the operation of the GDPs. The privatization would be accomplished through a public offering of common stock of USEC, Inc.
=An IPO privatization' transaction, if selected by the USEC-Government Board of Directors and Japproved by the Secretary of the Treasury, will be in compliance with applicable statutory requirements and the tests and presumptive limits related to foreign ownership, control, and influence (FOCI) that were developed in consultation with NRC, DOE, and other federal agencies.
- FOCI materials prepared in accordance with the FOCI Guidance Documentsjointly developed by NRC and DOE for the USEC-Government privatization were provided to the NRC on January 30, 1998.. Updated FOCI information is provided in Enclosure 1.
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Dr. Carl J. Paperiello 1May 1,1998 GDP 98-0091, Page 3 Additional information requested by the NRC with respect to the potential IPO transaction under the draft NRC Standard Review Plan for the Issuance or Transfer of the GDP Certificates, and NRC Information Notice 89-25, Rev.1 (Dec. 7,1994) is contained in Enclosure 2. A' graphical representation of the necessary steps in creating the final company structure are provided in, and Enclosure 4 graphically depicts the post-privatization corporate structure.
1 A' description of, and justification for, the dran proposed changes to the NRC Certification
' Applications'for PGDP and PORTS to reflect the privatization of USEC-Government pursuant to
- an IPO are provided in Enclosure 5. Drafts of the proposed changes to the NRC Certification Application to reflect the privatization of USEC-Government pursuant to an IPO are identified in for PGDP and Enclosure 7 for PORTS (only those pages that contain actual changes are provided). A draft significance determination ihr these changes is provided in Enclosure 8 for both PGDP and PORTS, as it is anticipated the same determination could be used for both plants. The -
draft proposed changes address the corporate structure planned for the IPO transaction. A formal
' certificate amendment request will be submitted in the future for each plant that will incorporate any NRC comments on the enclosed information. Note that the pages out of the classified PGDP and PORTS security plans that are included in this submittal are unclassified, as documented on the covers of the applicable security plans, but are proprietary as described in 10 CFR 2.790(d)(1).
.' The current members of the USEC-Government Board of Directors were appointed by the President and confirmed by the U.S. Senate. Although permitted to continue to serve on the Board of Directors after privatization, the current members have decided to step down upon privatization.
Information on the new Boards of Directors of USEC, Inc., USEC-Private, and USEC Services Corporation will be provided to the NRC when the new directors are identified. The current officers of USEC-Government presently identified in Section 6.1 of the Paducah and Portsmouth Safety Analysis Reports will assume similar positions at USEC-Private. This includes the current USEC-Government CEO, Executive Vice President, Operations, and Vice President, Production.
On matters related to the safe and secure operation of the GDPs, these officers will report exclusively to the USEC-Private Board of Directors. The NRC will be promptly informed of any changes that may occur in this area. All of the directors of USEC, Inc., USEC-Private, and USEC Services 1 Corporation will be citizens of the United States.
This request and the a' ttachments hereto contain confidential commercial or financial information
.or trade secrets that are exempt from public disclosure pursuant to Section 1314 of the AEA and 10 CFR $ 2.790 and 9.17(a)(4). USEC-Government respectfully requests that all of these documents be withheld from public disclosure until further notice. The enclosed affidavit provides the information required by 10 CFR { 2.790(b)(4) with respect to such a request. After the closing of the privatization transaction, USEC-Government will provide NRC with a list of the documents, or portions thereof, related to the privatization which can be publicly disclosed.
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Dr. Carl J. Paperiello May 1,1998 GDP 98-0091, Page 4 USEC-Government appreciates the NRC's cooperation and support in this unprecedented and challenging endeavor.
New commitments made in this submittal are documented in Enclosure 9. Ifyou need any additional information, please contact me or Mr. Steven Toelle at (301) 564-3250.
Sincerely, f
Geor e P. Rifakes Executive Vice President, Operations
Enclosures:
- 1. Updated FOCIInformation
- 2. Information Related to the Transfer of USEC-Government's Certificates of Compliance Pursuant to Initial Public Offering
- 3. Steps in Creating Post-Privatization Structure
- 4. Post Privatization Structure
- 5. Description of, and Justification for, Draft Proposed Changes to the NRC Certification Application
- 6. Proposed Draft Changes to the PGDP NRC Certification Application
- 7. Proposed Draft Changes to the PORTS NRC Certification Application
- 8. United States Enrichment Corporation (USEC-Government) Proposed Draft Significance Determination for NRC Certification Application Changes for PGDP and PORTS for IPO Transaction
- 9. New Commitments Made in This Submittal
Dr. Carl J. Paperiello May 1,1998 GDP 98-0091, Page 5 REFERENCES 1.
Letter from Steven A. Toelle (USEC) to Carl J. Paperiello (NRC), " Preliminary Request for NRC Review ofInformation Regarding the Privatized Structure of USEC Under the Initial Public Offering (IPO) Option," Paducah and Portsmouth Gaseous DifTusion Plants, ODP 98-0044, March 13,1998.
AFFIDAVIT OF GEORGE P. RIFAKES SUPPORTING REQUEST TO WITIIIIOLD THE REQUEST FOR NRC CONSENT TO TRANSFER THE USEC CERTIFICATES OF COMPLIANCE UNDER THE INITIAL PUBLIC OFFERING OPTION AND REL ATED DOCUMENTS FROM PUBLIC DISCLOSURE I, George P. Rifakes, Executive Vice President, Operations, United States Enrichment Corporation (USEC), having been duly sworn do hereby affirm and state:
- 1. I am an officer of USEC and have been authorized by USEC to review the documents which USEC is submitting by Letter GDP 98-0091, dated May 1,1998, to the Nuclear Regulatory Commission (NRC) in connection with the privatization of USEC which USEC seeks to have withheld from public disclosure pursuant to section 1114 of the Atomic Energy Act of 1954 (AEA), as amended,42 U.S.C.
2297b-13 and 10 CFR 2.790 and 9.17(a)(4). Based on this review, and on behalfof USEC, I hereby request that the NRC withhold all of these documents from public disclosure until further notice. USEC will provide NRC with a list of the privatization
- documents, or any portions thereof, which no longer need to be withheld from public disclosure.
- 2. USEC is a corporation owned and controlled by the United States which operates the Gaseous Diffusion Plants (GDPs) located in Portsmouth, Ohio and Paducah, Kentucky pursuant to Certificates of Compliance Nos. GDP-1 and GDP-2 issued by the NRC under 10 CFR Part 76.
- 3. 10 CFR 2.790(a)(4) exempts from public disclosure "[t]rade secrets and commercial or financial information obtained from a person and privileged or confidential." 10 CFR 2.790(d)(1) exempts from public disclosure " Correspondence and reports to or from the NRC which contain information or records concerning a licensee's or applicant's physical protection or material and control and accounting program for special nuclear material not otherwise designated as Safeguards Information or classified as National Security Information or Restricted Data."
- 4. The USEC privatization documents which USEC is submitting, to the NRC contain confidential commercial or financial information exempted from public disclosure pursuant to 10 CFR 2.790(a)(4),
2.790(d)(1), and 9.17(a)(4). These documents contain descriptions of USEC's business plans and detailed financial information, information concerning USEC's customers and descriptions of the possible IPO of USEC's securities, information concerning USEC's physical protection or material and control and accounting program for special nuclear material not otherwise designated as Safeguards Information or classified as National Security Information or Restricted Data, or other confidential information which has substantial commercial value to the United States Government, the U.S. Department of the Treasury and USEC.
- 5. These documents have been held in confidence by USEC. To the extent that USEC has shared any of these documents or portions of these documents with other government agencies, USEC's financial advisors and prospective bidders, it has done so on a confidential basis and in furtherance of the requirements and criteria set forth in the USEC Privatization Act.
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- 6. These documents are the types ofdocuments that are customarily held in highest confidence by USEC.
There is a rational basis for doing so because much of the information in these documents is commercially valuable and could be used by USEC's competitors, customers, and/or prospective bidders to gain commercial advantages in competing or dealing with USEC or participating in the bidding process for the privatization of USEC.
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AFFIDAVIT OF GEORGE P. RIFAKES SUPPORTING REQUEST TO WITHHOLD TIIE REQUEST FOR NRC CONSENT TO TRANSFER TIIE USEC CERTIFICATES OF COMPLIANCE UNDER THE INITIAL PUBLIC OFFERING OPTION AND RELATED DOCUMENTS FROM PUBLIC DISCLOSURE
- 7. These documents are being transmitted to, and received by, the NRC in confidence.
- 8. Neither these documents nor the commercially sensitive information contained in these documents could be readily assembled or reconstructed from other publicly available information.
- 9. Public disclosure of these documents would be likely to cause substantial harm to the competitive position and financial well-being of USEC. Specifically, disclosure of these documents or their contents would provide USEC's competitors and customers with detailed information concerning USEC's business plans, detailed financial information, and information concerning USEC's customers. Disclosure of these documents would also provide potential bidders with confidential information concerning USEC's " dual path" approach to privatization and the bidding process that would provide them with an unfair advantage in the bidding.
Disclosure of this sensitive business and marketing information, cost data, and confidential information about I
the privatization process itself would cause substantial harm to the competitive position of USEC. It would also adversely affect the ability of the USEC Board of Directors and the Secretary of the Treasury to fulfill their statutory responsibility to maximize the amount of privatization proceeds to the U.S. Treasury.
I hereby confirm that I am authorized on behalf of USEC to review these documents and to sign and file with the Nuclear Regulatory Commission this affidavit and the documents attached hereto, and that the statements made and matters set forth herein are true and correct to the best of my knowledge or belief.
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/GeorgeM. Rifakes On this 1st day of May,1998, the officer signing above personally appeared before me, is known by me to be the person whose name is subscribed to within the instrument, and acknowledged that he executed the same for the purposes therein contained.
In witness hereofI hereunto set my hand and official seal.
a dam 197 M A Lu' Ladrie M. Knisley, Notary Public State of Maryland, Montgomery County My commission expires March 1,2002 l