US nuclear start-up Ultra Safe Nuclear Corporation (USNC) is seeking to run a sale process pursuant to Section 363 of Chapter 11 of the US Bankruptcy Code. The filing covers USNC and its subsidiaries – Ultra Safe Nuclear-Technologies, USNC-Power, and Global First Power Ltd. UNSC says that, during these proceedings, it will maintain full operational continuity across its projects, including deployment of its Micro Modular Reactor (MMR) systems in the US and Canada, large-scale production of fuels, and the fulfilment of space and defence projects for multiple US government agencies.
USNC also says it “has obtained debtor-in-possession financing that, following court approval, adequately supports its business operations and satisfies its obligations during the court-supervised process”. USNC also announced that it had entered into an asset purchase agreement (APA) with Standard Nuclear Inc to serve as the “Stalking Horse Bidder” for its fuel-related assets and technology development contracts. Standard Nuclear will acquire the assets for $28m in cash. USNC asked the Court for approval to complete the transaction in December. USNC intends to continue a sale process for its remaining assets and effectuate any resulting sale transactions in line with the US Bankruptcy Code.
USNC’s MMR is a high-temperature gas-cooled “nuclear battery” designed to operate at various power levels from 10 MWt (3.3 MWe) to 45 MWt (15 MWe) fuelled with either high-assay low-enriched uranium (HALEU – 19.75% enrichment) or enhanced low enriched uranium (LEU+ – 9.9% enrichment).
In August 2022, USNC opened its Pilot Fuel Manufacturing (PFM) facility in Oak Ridge at the East Tennessee Technology Park (ETTP), to produce the first fuel for testing and qualification for use in the MMR. Its Fully Ceramic Microencapsulated (FCM) fuel enhances safety through proprietary technology to embed Tri-structural Isotropic (TRISO) particles in a silicon carbide matrix. In December 2023, USNC signed an agreement with France’s Framatome to establish a joint venture (JV) to provide fuel for the MMR and other advanced reactor designs.
The MMR is being licensed in Canada and the US. USNC has MMR deployment projects in Canada at the Canadian Nuclear Laboratories in Chalk River, in the USA at the University of Illinois Urbana-Champaign, and at LUT University in Lappeenranta, Finland and in Poland. Additional projects were under development in the USA, Canada, and Europe. The Chalk River and Urbana-Champaign projects were targeted for first power in 2028 and the joint venture to manufacture TRISO particles and FCM fuel was expected to start in 2026.
In July 2023, USNC was awarded a £22.5m ($29.3m) matching funds grant by the UK Department for Energy Security & Net Zero (DESNZ) to accelerate the design and deployment of the MMR in the UK and global markets. In October 2023, USNC won a contract from NASA to develop and mature Nuclear Thermal Propulsion systems. USNC the previous June had delivered nuclear fuel to NASA’s Space Nuclear Power & Propulsion programme produced at the PFM – the first ever delivery to NASA by industry of uranium nitride coated particle TRISO fuel.
“Ultra Safe Nuclear remains steadfast in its dedication to bringing safe, commercially competitive, clean and reliable nuclear energy to global power and industrial markets,” said Kirk Edwards, Chairman of USNC’s Board of Directors. “After carefully exploring all available options, we have decided that this court-supervised sale process offers the best path forward while ensuring continuity across our key technology initiatives.”
He added: “These initiatives include bringing our TRISO-based fuels to market, deploying MMRs as a carbon-free energy solution, and advancing essential technologies for the US Department of Defense, NASA, and the UK Department of Energy Security & Net Zero. We are pleased to begin this process with an agreed-upon offer from an entity aligned with our strategic objectives and experienced in the sector. We appreciate our stakeholders’ continued loyalty as we work towards a stronger future for USNC.”
The Company has filed customary motions seeking court approval to continue its operations as normal during the court-supervised process, including the payment of employee wages. USNC has also filed customary motions seeking court approval to meet all post-petition obligations to vendors. USNC is represented by Young Conaway Stargatt & Taylor as restructuring counsel and Ankura Consulting as financial advisor. Intrepid Investment Bankers is serving as investment banker.
USNC’s decision came after the death of its most significant backer, Richard Hollis Helms, a former officer of the US Central Intelligence Agency (CIA), who had invested about $100m in the venture and provided another $25m in loans. Kurt Terrani, interim chief executive, in filings to a Delaware court said historically USNC mainly relied on equity investments to fund development. The company had been seeking to raise further funds since 2022 but had struggled to secure an “anchor investor”, he added. The death of Helms was a final blow.
According to the court filings, USNC’s estimated assets fall within the $10 million to $50 million range, while its estimated liabilities are reported within the $50 million to $100 million range. The company indicates funds will be available for distribution to unsecured creditors after administrative expenses and estimates the number of creditors, on a consolidated basis, at 1,000 to 5,000. The Dutch government, Japan’s Hyundai, Germany’s Siemens, US software company Oracle and the Massachusetts Institute of Technology are among the company’s top 20 creditors.
Richard Ollington, a nuclear expert and partner at Radiant Energy Group, told the Daily Telegraph that the bankruptcy filing underlined the large numbers of small nuclear start-ups currently in the market – many of which are bound to fail. “There are more than 80 new reactor designs being developed. It’s inconceivable they will all get built at scale. There will be designs that fail to materialise,” he said.
Joyce Connery, Chair of the US Defense Nuclear Facilities Safety Board (DNFSB) told webinar hosted by the American Nuclear Society (ANS) that USNC’s bankruptcy is part of the “natural churn that will happen in the industry”. She added: “Not every company will succeed, and that’s okay. The important thing is that we maintain the overall momentum and excitement for nuclear energy. We need to have patience and recognise that this is an evolutionary process, not a revolutionary one. Some companies will fall out, but that allows better ideas and stronger companies to move forward.”
