Philip Strawbridge, EnergySolutions International group president, said the company needs to focus on its other U.K. business. In addition to chasing the Sellafield contract, the company is bidding to manage the U.K.'s national repository of low-level radioactive waste and pursuing the decommissioning of U.K. reactor sites.
Although the company is qualified to tackle all of the projects, it now believes "it is best to not lead all three efforts," Strawbridge said in a statement.
He also said the move does not diminish EnergySolutions' appetite for global expansion.
A year ago, the company bought BNG America, a company that manages and cleans up nuclear reactors and highly contaminated sites. Around the same time, President and Chief Executive Officer Steve Creamer announced plans to take the company public and to bid on the government-owned British Nuclear Group's (BNG) nuclear waste reprocessing facility at Sellafield, as well as other cleanup sites in the United Kingdom.
The acquisition would position EnergySolutions to become a full-spectrum nuclear company capable of jumping into nuclear fuel reprocessing should the U.S. ban on it be lifted. Creamer estimated reprocessing as a $100 billion business over the next 10 years to 15 years.
EnergySolutions has since received government funding to look at building reprocessing plants in Idaho, South Carolina and New Mexico. The U.S. Department of Energy recently extended the public comment period until June 4 on those reprocessing proposals.
Public scrutiny of spent fuel reprocessing creates a potential conflict for EnergySolutions, said Vanessa Pierce of the Healthy Environment Alliance of Utahns.
Noting the serious health and safety problems traced to leaks at the Sellafield plant, Pierce said EnergySolutions would have had a tough time arguing that reprocessing works, while also dealing with the fallout from its failures.
"From a PR prospective, it can't look good that the technology they're touting is being shut down elsewhere," Pierce said.
It also could be a money matter, Pierce said. EnergySolutions saw its revenues decline dramatically between 2005 and 2006, from $138.1 million to $34.4 million, or about 76 percent. In its IPO filings with the U.S. Securities and Exchange Commission, the company said it hopes to raise $500 million and use the money to help pay off money owed to employees and to repay outstanding debt of more than $764 million.
According to the filings, the agreements with creditors restrict the company's ability to make investments, enter into transactions with affiliates and make capital expenditures.
EnergySolutions wasn't the only company to bail on the Sellafield competition. U.S.-based Jacobs Engineering Group Inc. also bowed out, leaving four bidders - CH2M HILL International Nuclear Services Ltd.; Fluor Ltd., in partnership with Japan's Toshiba; SBB Nuclear, consisting of Serco Holdings Ltd. Bechtel Management Co. Ltd. and BWXT Nuclear Services (U.K.) Ltd.; and Washington Group International Ltd./AMEC Nuclear Holdings Ltd./AREVA NC.
The UK's Nuclear Decommissioning Authority said it expects to announce the winner in mid-2008.
lfantin@sltrib.com
