I saw the alert on this stock. Disclosure: I am neither short nor long USU. However, I do trade, just not this puppy. Anyway, this company is going nowhere, in spite of what some say on this board. How do I know? I know...can't say right now. The move started today is temporary. Longs should use it to get out soon and either book a profit or reduce capital loss. Don't get greedy or don't hope the market will bail you out. Here it is... a gift. That said, on the reverse side, here is a great short opportunity. But me, I'm not playing, just saying.
The USU mgmt even said on the Q3 conf call that they are looking at a restructuring of the debt, that is code for a reorganization or bankruptcy that wipes out the equity holders. There is a big difference between USU surviving and the common shareholders surviving. I've been following this company for 10 years and mgmt has never once said the ACP is not economically viable until the Q3 call last week. Today's bump is a gift, use it.
If we are able to obtain additional government support for the American Centrifuge project and to continue to fund the project beyond the RD&D program, we expect to need at least $4 billion of capital in order to commercially deploy the ACP. While a portion of that capital could include cash generated by the project during startup and additional capital contributions from USEC, the majority of the capital will need to come from third parties. We have been pursuing a loan guarantee under the DOE Loan Guarantee Program, which was established by the Energy Policy Act of 2005, in order to obtain the funding needed to complete the ACP. In July 2008, we applied under the DOE Loan Guarantee Program for $2 billion in U.S. government guaranteed debt financing for the ACP. We have also had discussions with Japanese export credit agencies regarding financing up to $1 billion of the cost of completing the ACP, with such potential financing predicated on our receiving a DOE loan guarantee. As part of the commercialization effort, we expect to need additional investors in the project which would reduce our ownership in the project. However, in order to successfully raise this capital, we need to demonstrate a viable business plan that supports loan repayment and provides potential investors with an attractive return on investment based on the project's risk profile. As described above, current enrichment market conditions do not support a viable business plan for obtaining the capital necessary for ACP commercialization without additional government support.
Our $530 million of convertible senior notes mature on October 1, 2014 and we will need to restructure this debt before its maturity date. In light of the significant transition of our business and the uncertainties and challenges