Extremely Protected Nuclear Corp. (USNC), a developer of much-watched microreactor expertise and superior nuclear gasoline, has filed for Chapter 11 chapter. The transfer alerts a important restructuring section by which the corporate will search to safe new possession whereas making certain uninterrupted operations.
The corporate’s Oct. 29 filings on the U.S. Chapter Courtroom for the District of Delaware embody its key subsidiaries: USNC-Energy Ltd., which develops the corporate’s flagship 5-MWe (15 MWth) Micro Modular Reactor (MMR) expertise; International First Energy Restricted (GFP), centered on nuclear undertaking growth inside Canadian markets; and USNC-Applied sciences, which leads USNC’s nuclear expertise analysis and growth initiatives. Every subsidiary performs a definite function in USNC’s vertically built-in method to advancing its Gen IV nuclear expertise.
Course of Designed to Preserve USNC Working
USNC’s petition is meant to facilitate a streamlined sale course of underneath Part 363 of the Chapter Code, which might permit the Oak Ridge, Tennessee–headquartered USNC to dump belongings whereas persevering with to function its present tasks underneath a court-supervised course of.
“Throughout these proceedings, USNC will preserve full operational continuity throughout its tasks, together with the deployment of its Micro Modular Reactor (MMR) programs within the U.S., Canada, large-scale manufacturing of TRISO-based and Totally Ceramic Microencapsulated (FCM) fuels, and the achievement of area and protection tasks for a number of U.S. authorities companies,” the corporate mentioned on Tuesday.
The corporate is invested in two separate MMR high-temperature gas-cooled reactor (HTGR) tasks. In Canada, GFP is spearheading a 15-MWe MMR demonstration at Canadian Nuclear Laboratories’ Chalk River web site in partnership with Ontario Energy Technology. The undertaking, which kicked off in 2019, is presently pursuing licensing, engineering and system growth, and environmental evaluation. Web site work is slated to start in 2026, with operations scheduled in 2028 or 2029. USNC can be creating an MMR that shall be constructed and operated on the College of Illinois at Urbana-Champaign’s Grainger Faculty of Engineering as a Class 104(c) utilization facility for analysis and growth functions.
The continuity will even try to maintain USNC’s efforts to scale up manufacturing of its TRISO-based Totally Ceramic Microencapsulated (FCM) fuels, which may very well be utilized to each terrestrial and area purposes. In August 2022, the corporate opened a pilot gasoline manufacturing facility in Oak Ridge, Tennessee, the place it intends to supply the primary gasoline for testing and qualification to be used within the MMR. The corporate can be collaborating with the U.S. Division of Protection and NASA on superior radioisotope-based energy manufacturing expertise, nuclear thermal propulsion programs, and superior supplies.
The corporate additionally has obligations tied to grants. In July 2023, it secured a $29.3 million matching funds grant as a part of a partnership with nuclear companies agency Jacobs from the UK’s Superior Modular Reactor (AMR) RD&D Programme, Part B, a program that goals to reveal HTGR expertise by the early 2030s.
Stalking Horse Bid and Sale Course of
In response to court docket paperwork, USNC has secured debtor-in-possession (DIP) financing, a monetary lifeline, which, contingent on court docket approval, will present important liquidity to uphold obligations to staff and distributors pending court docket approval.” USNC intends to proceed a sale course of for its “remaining belongings and effectuate any ensuing sale transactions pursuant to Part 363 of the U.S. Chapter Code,” it mentioned.
As one other notable side of its restructuring, USNC has entered into an asset buy settlement with Customary Nuclear. The settlement positions the funding agency because the “stalking horse” bidder for USNC’s fuel-related belongings. The stalking horse bid, valued at $28 million, serves as a aggressive minimal bid—a “flooring value”—for USNC’s belongings to make sure that the sale course of garners market curiosity and honest valuation for stakeholders. “USNC has requested the Courtroom for approval to finish the transaction in December,” the corporate famous on Tuesday.
In response to the court docket filings, USNC’s estimated belongings fall throughout the $10 million to $50 million vary, whereas its estimated liabilities are reported throughout the $50 million to $100 million vary. The corporate signifies funds shall be accessible for distribution to unsecured collectors after administrative bills and estimates the variety of collectors, on a consolidated foundation, at 1,000 to five,000. Nonetheless, the monetary image means that USNC faces a big debt burden, which exceeds its reported belongings. As a result of USNC has a consolidated possession construction, the corporate will doubtless realign subsidiary operations underneath a single framework, with USNC’s management and board actively concerned within the restructuring.
The court docket paperwork point out that USNC’s management and board of administrators absolutely supported the choice to proceed with Chapter 11. The board “reviewed and regarded the monetary and operational situation” of the corporate and its enterprise and weighed its present and long-term liabilities in addition to the suggestions of its authorized and different advisers relating to the dangers of pursuing a chapter continuing, the filings say.
“After fastidiously exploring all accessible choices, we’ve determined that this court-supervised sale course of provides one of the best path ahead whereas making certain continuity throughout our key expertise initiatives,” mentioned Kirk Edwards, chairman of USNC’s Board of Administrators, in an announcement on Tuesday. “These initiatives embody bringing our TRISO-based fuels to market, deploying MMRs as a carbon-free vitality answer, and advancing important applied sciences for the U.S. Division of Protection, NASA, and the UK Division of Vitality Safety and Internet Zero. We’re happy to start this course of with an agreed-upon supply from an entity aligned with our strategic targets and skilled within the sector. We respect our stakeholders’ continued loyalty as we work in the direction of a stronger future for USNC.”
Trade Views: A Stumble, Not a Setback
USNC’s chapter marks a stumble—albeit evident—for the superior nuclear trade’s burgeoning progress, given the corporate’s seemingly strong technique to commercialize its microreactor and superior gasoline applied sciences. Based in 2011 by Dr. Francesco Venneri to commercialize his innovation, FCM gasoline, the corporate has since garnered substantial trade assist, equivalent to from entities like Hyundai Engineering and main buyers just like the Miranda Group. The Chapter 11 filings, nonetheless, underscore substantial commerce debt.
The corporate’s troubles arrive because the nuclear trade seems buoyant amid quite a few substantial latest triumphs that illustrate strong confidence from buyers, policymakers, and trade within the sector. Earlier this month, tech large Amazon dedicated to an enormous nuclear deployment of 5 GW with X-Vitality’s HTGR SMRs in collaboration with Vitality Northwest and Dominion. Google additionally introduced a partnership with Kairos Energy to construct a 500-MW molten salt reactor SMR fleet for knowledge middle energy, whereas the Division of Vitality (DOE) launched $900 million to speed up Gen III+ SMR deployment, concentrating on two pioneering tasks. Individually, the DOE took decisive steps to advance high-assay low-enriched uranium (HALEU) provide chains, deciding on 4 corporations for enrichment and 6 for deconversion companies to gasoline next-gen reactors.
On Tuesday, trade consultants advised that USNC’s Chapter 11 submitting displays the broader maturation of the nuclear sector. Many noticed the problem as a pure section within the trade’s evolution, the place advanced, high-stakes tasks require time, funding, and resilience.
USNC’s chapter is a part of the “pure churn that can occur within the trade,” mentioned Joyce Connery, chair of the Protection Nuclear Amenities Security Board (DNFSB), throughout a webinar hosted by the American Nuclear Society (ANS) on Tuesday. “Not each firm will succeed, and that’s okay,” she mentioned. “The essential factor is that we preserve the general momentum and pleasure for nuclear vitality. We have to have persistence and acknowledge that that is an evolutionary course of, not a revolutionary one. Some corporations will fall out, however that permits higher concepts and stronger corporations to maneuver ahead.”
Seth Grae, CEO of metallic gasoline expertise agency Lightbridge Corp., identified that “bankruptcies aren’t unusual, even for profitable corporations within the nuclear industries. We noticed it with Westinghouse—they usually got here out stronger,” he mentioned.
Bradley Williams, senior coverage advisor on the Idaho Nationwide Laboratory, additionally advised that USNC’s monetary troubles could not hinder the nuclear sector’s total progress. “Whereas the USNC chapter is definitely not excellent news, I don’t suppose it’s a deadly blow to the nuclear trade’s momentum,” he mentioned. The sector has navigated challenges earlier than, he famous. “By way of optimism, we had one other hiccup final 12 months with the UAMPS undertaking and NuScale,” he mentioned. The businesses mutually moved to terminate the 462-MWe SMR undertaking in November 2023 after it didn’t safe sufficient subscriptions, although all indications have been that the undertaking was on monitor for the plant to be absolutely working by 2030. “I used to be engaged on the Hill. On the time, no one batted a watch. They acknowledge that there shall be bumps within the highway, and never all people shall be profitable. Hopefully, USNC comes out of the chapter stronger to maintain shifting ahead,” he mentioned.
For now, as Patrick White, analysis director on the Nuclear Innovation Alliance, identified, the industrial maturation of the trade seems nicely aligned with the “proper circumstances.” The trade is presently fielding “robust federal and state assist, rising buyer demand, and a extra responsive regulatory setting,” he mentioned. “So long as we preserve that total momentum, the occasional setback like USNC gained’t cease the ahead progress of the nuclear sector.”
—Sonal Patel is a POWER senior editor (@sonalcpatel, @POWERmagazine).
