Lex: Urenco
>From the wreckage of the UK's nuclear industry a few rays of light are now starting to emerge. The government
has decided against a full initial public offering for British Nuclear Fuels, but the privatisation door remains open
for some of its units. While BNFL will focus on nuclear clean-up within the UK, its other operations are to be managed
"to deliver value" - in other words, spruced up for sale or flotation.
In the front rank of these is Westinghouse, which designs and builds nuclear power stations. But the real jewel in
the BNFL portfolio is Urenco, a uranium enrichment joint venture. BNFL and the Dutch government own a third each, while
the remaining third is split equally between RWE and Eon of Germany. Urenco has only three competitors: Areva's
Eurodif, USEC and Russia's Tenex. But its gas centrifuge technology is streets ahead of the competition, allowing
it to lift its share of the world market from 8 per cent 10 years ago to 18-20 per cent today. Its competitors recognise
this edge: Areva last month licensed its technology, while USEC tried to buy the whole company.
Uranium enrichment clearly brings strategic and non-proliferation issues, but if USEC and Areva can be floated so can
Urenco. It makes a 21 per cent return on capital employed, with 12 per cent annual earnings growth over the last four
years. Areva, which is bigger, but barely manages 1 per cent ROCE, is currently valued at €6.9bn. An early IPO could
bring in a healthy contribution to both British and Dutch coffers.
|
RUSSIA IN FACTS
