The Tokyo Electric Power Company, Incorporated
The Japan Bank for International Cooperation
Tokyo - The Tokyo Electric Power Company, Incorporated (TEPCO) (TOKYO:
9501), Toshiba Corporation (Toshiba) (TOKYO: 6502), and the Japan Bank
for International Cooperation (JBIC), the international wing of the
Japan Finance Corporation, today announced that they have signed a new
agreement with Uranium One Inc. (U1) (UUU.TO), a major Canadian-listed
producer and marketer of uranium, that will end their investment in U1
while securing long-term uranium purchase rights.
With a view to securing stable supply of uranium for civil-use nuclear
power plants, the three companies signed a strategic relationship
agreement with U1 in February 2009, under which they agreed to subscribe
to U1's issue of 117 million new common shares for allocation to third
parties. This was amended in December 2009 when the Japanese companies
agreed to take up U1's convertible debentures instead of common shares,
and that transaction was completed in January 2010.
The new agreement will revise the current relationship as follows.
(1) The Japanese companies will receive purchase rights for up to 2.5
million pounds of natural uranium (U3O8) a year from 2014 to 2025,
against the current right to up to 20 percent of U1's annual
(2) U1 will buy back the convertible debentures for C$271.79 million -
equal to 101% of the C$269.1 million principal amount originally
paid by the three companies.
A June 2010 proposal by JSC Atomredmetzoloto (ARMZ), a Russian uranium
mining company, to acquire a majority stake in U1 was accepted by U1's
board in July subject to shareholder approval and relevant government
approval. The Japanese companies and U1 have reviewed their relationship
and confirmed that the Japanese companies could achieve their original
objective of securing uranium purchase rights without holding the
convertible debentures in U1, and agreed to the new arrangement.
The mechanics of the agreement - the sale of the convertible debentures
and confirmation of purchase rights - are expected to be effective by
December this year, subject to the completion of ARMZ's acquisition of
U1's common shares.
The three Japanese companies will continue to maintain a close
relationship with U1.