October 15, 2010 / 9:20 PM / in 9 years

FACTBOX-Constellation/EDF UniStar nuclear timeline

 Oct 15 (Reuters) - Constellation Energy Group Inc CEG.N on Friday offered to transfer its half-interest in a nuclear joint venture to France’s Electricite de France SA (EDF) (EDF.PA) at a bargain price, but said a dispute over an unrelated put option should be addressed separately.
 The following is a timeline of how Constellation and EDF got to this point: Sep 2005 - Constellation, of Baltimore, announced a new joint
venture, UniStar Nuclear LLC, with French nuclear
engineering firm Areva SA CEPFi.PA to market the European
Pressurized Reactor (EPR), also called the Evolutionary
Pressurized Reactor, in the United States Jul 2007 - EDF and Constellation formed a new nuclear joint
venture, UniStar Nuclear Energy LLC, to develop and deploy
new reactors based on Areva’s EPR design. EDF agreed to
invest up to $625 million into UniStar. Constellation
contributed its interest in the pre-existing UniStar venture
with Areva. In addition, EDF can buy up to 9.9 percent of
Constellation stock Sep 15, 2008 - Lehman Brothers filed for bankruptcy
protection. The Dow Jones Industrial Average dropped almost
500 points, or 4.4 percent. Constellation common stock
dropped nearly 18 percent, in part on concerns of exposure
to Lehman, to a new 52-week low of $47.99, on trading volume
of more than 8 million shares, or over twice the average
trading volume of the company’s common stock over the 30
prior days. Constellation issued an 8-K to calm market
concerns Sep 16, 2008 - The 8-K disclosures did not calm the market and
the Constellation stock declined precipitously to an
intra-day low of $13 before closing down by 36 percent, at
$30.76, on trading volume of more than 41 million shares. Sep 17, 2008 - Constellation stock fell another 19 percent to
$24.77. The company said it hired Morgan Stanley and UBS to
advise on strategic alternatives Sep 18, 2008 - MidAmerican Energy, part of Warren Buffett’s
Berkshire Hathaway, agreed to buy Constellation for $4.7
billion, or $26.50 a share, halting the Constellation stock
price decline Dec 2008 - Constellation cancelled its merger with MidAmerican
and agreed to a sweetened offer from EDF, which already
owned about 9.5 percent of Constellation’s shares (in
September) following the 2007 UniStar agreement
    - EDF agreed to buy 49.99 percent interest in
      Constellation’s nuclear generation business for $4.5
      billion. The agreement included an immediate $1
      billion cash investment in Constellation and an option
      to sell to EDF up to $2 billion of non-nuclear
      generation assets. Constellation remained an
      independent publicly traded company
    - MidAmerican meanwhile received a $175 million
      termination fee. In addition, the preferred shares
      issued to MEHC Investment Inc, a wholly owned
      subsidiary of MidAmerican, were converted, and MEHC
      Investment received a $1 billion note at 14 percent
      interest, maturing Dec. 31, 2009; approximately 20
      million shares of Constellation common stock,
      representing 9.99 percent of outstanding shares; and
      approximately $418 million in cash.  Summer/Autumn 2010 - Constellation and EDF squabbling over the
$2 billion put option for the non-nuclear generation assets
since the current value of those assets had declined,
according to energy analysts Oct 8, 2010 - Constellation informs U.S. Department of Energy
it will not move forward with the loan guarantee process
regarding UniStar’s Calvert Cliffs 3 new nuclear power
reactor because the proposed terms and conditions were
unworkable Oct 13, 2010 - EDF said in a letter to Constellation the French
firm would shoulder 100 percent of the risk of Calvert
Cliffs 3 until construction begins. EDF also said it was
prepared to buy all of Constellation’s interest in UniStar
and develop the project without Constellation with a view to
bringing in a new U.S. partner at the appropriate time. In
return, EDF wanted Constellation to give up the put
option for the nonnuclear generation Oct 15, 2010 - Constellation said it would sell its interest in
UniStar to EDF for $1 plus $117 million in reimbursement for
generic development and design costs for the US EPR. But
Constellation said it would not give up on the put option  (Reporting by Scott DiSavino;editing by Sofina Mirza-Reid)       

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