UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 Under
the Securities Exchange Act of 1934
For the month of May, 2012
Cameco Corporation
(Commission file No. 1-14228)
2121-11th Street West
Saskatoon, Saskatchewan, Canada S7M 1J3
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ¨ Form 40-F þ
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No þ
If Yes is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):
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Exhibit Index
Exhibit No. |
Description |
Page No. | ||
1. |
Material Change Report May 17, 2012 |
3 - 6 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: May 17, 2012 | Cameco Corporation | |||||
By: | ||||||
Gary M. S. Chad | ||||||
Gary M. S. Chad | ||||||
Senior Vice-President, Governance, | ||||||
Law and Corporate Secretary |
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Exhibit 1
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1 Name and Address of Company
Cameco Corporation (Cameco)
2121 11th Street West
Saskatoon, Saskatchewan S7M 1J3
Item 2 Date of Material Change
May 13, 2012
Item 3 News Release
The news release relating to the material change described in this report was issued by Cameco via Marketwire on Monday, May 14, 2012. A copy of the news release has been filed on SEDAR and is available at www.sedar.com.
Item 4 Summary of Material Change
On May 13, 2012, Cameco entered into an agreement with Advent International to purchase NUKEM Energy GmbH, one of the worlds leading traders and brokers of nuclear fuel products and services. Under the agreement, Cameco will pay Advent and other shareholders 105 million (US$136 million) on closing subject to certain adjustments. Cameco will receive the benefits of owning NUKEM and the obligation for the companys net debt of 127 million (US$164 million) as of January 1, 2012. As a result of cash generated from its ongoing business activities, NUKEM is expected to significantly reduce the balance of its debt prior to closing.
The agreement also includes provisions that could provide Advent with a share of NUKEMs future earnings under certain conditions until the end of 2014. The agreement is subject to regulatory approvals and is expected to close in the fourth quarter of 2012. Following closing, NUKEM will continue to operate as an independent company. NUKEM has 35 experienced professionals and support staff at its offices in Alzenau, Germany and Danbury, Connecticut. Key personnel within NUKEM have committed to remain with the company.
Item 5 Full Description of Material Change
On May 13, 2012, Cameco Deutschland Investments GmbH (the Purchaser), a wholly-owned subsidiary of Cameco, entered into a share purchase agreement (the Agreement) with Advent Energy S.à r.l. (Advent), Energie Beteiligungs-Management MEP GmbH & Co. KG and Energie Beteiligungs-Management UK MEP GmbH & Co. KG (collectively, the Sellers) and Cameco, as guarantor, pursuant to which the Purchaser will acquire all of the shares (the Shares) of NUKEM Energy GmbH (the Company), a limited liability company organized under the laws of Germany, from the Sellers. Advent is the majority shareholder of the Company. The Company wholly owns, directly or indirectly, three German limited liability companies and one U.S. corporation (the Subsidiaries and, together with the Company, the Companies), and has an indirect 49.5% interest in a Luxembourg company (the Participation). Collectively, the Company, the Subsidiaries and the Participation are referred to as the NUKEM Group.
Upon the closing, the sale and purchase of the Shares will be retroactively effective, as of January 1, 2012 (the Effective Date).
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Purchase Price
The initial purchase price (the Initial Purchase Price) for the Shares will be 104,865,000, minus (i) a potential adjustment of an amount equal to certain taxes that could be assessed against the Companies and (ii) certain of the Purchasers hedging costs. The Initial Purchase Price must be paid on the closing date, together with interest on the Initial Purchase Price at a rate of 5% per year, calculated from the Effective Date until the closing date.
Earn-Out Payments
The Agreement includes provisions that could provide Advent with a share of the NUKEM Groups future earnings under certain conditions until the end of 2014. Specifically, as a subsequent increase of the Initial Purchase Price, the Purchaser must pay to the Sellers:
(i) | The First Earn-Out Payment: A one-time earn-out payment amounting to 90% of the amount by which the consolidated EBITDA of the NUKEM Group for 2012, determined pursuant to a specific formula outlined in the Agreement, plus or minus an adjustment based on the value of the NUKEM Groups inventory for 2012, exceeds US$115 million (the First Earn-Out Amount), minus the Proportionate Income Tax (defined below) on the First Earn-Out Amount. |
(ii) | The Second Earn-Out Payment: A one-time earn-out payment amounting to 60% of the amount by which the consolidated EBITDA of the NUKEM Group for the period from January 1, 2012 through December 31, 2014, determined pursuant to a specific formula outlined in the Agreement, plus or minus an adjustment based on the value of inventory for that period, exceeds US$263 million (the Second Earn-Out Amount), minus the Proportionate Income Tax on the Second Earn-Out Amount, minus the amount of the First Earn-Out Payment, if any. |
The Proportionate Income Tax means (a) the respective earn-out amount divided by the consolidated EBITDA for the relevant time period, multiplied by (b) the respective Overall Income Tax. The Overall Income Tax means the total amount of income tax that would be due if the consolidated EBITDA of the NUKEM Group for the relevant period was subject to a total income tax rate of 30%.
In connection with the above earn-out payments, the Purchaser agreed to cause the NUKEM Group to refrain from certain activities from the closing until December 31, 2014, including implementing material changes to the business of the Companies and entering into any agreements with the Purchaser or any affiliate of Cameco which are not at arms length and on market conditions. In the event that the Purchaser violates such covenants, the second earn-out payment will be adjusted in favor of the Sellers pursuant to mechanisms outlined in the Agreement.
In addition, the Sellers are entitled to receive additional earn-out payments of up to US$15 million upon the satisfaction of certain other conditions.
Closing Conditions
The closing of the transaction is subject to the satisfaction of certain closing conditions, including the condition that the German Federal Ministry of Economics and Technology (the German Ministry) has approved the acquisition or issued binding orders in relation to the acquisition without prohibiting the transaction (and the parties have agreed in writing that they are prepared to comply with such orders and close the transaction), or that applicable waiting periods have expired without any order prohibiting the transaction. The closing is also conditioned on the receipt of all requisite approvals, clearances and waivers under U.S. and Chinese merger control law, or the expiry of applicable waiting periods, without any order or injunction of a court of competent jurisdiction in the U.S. or China prohibiting the transaction.
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The Purchaser is required to fulfill any additional conditions of the German Ministry and competent authorities in the U.S. at its own costs and risk unless such conditions have or may reasonably be expected to have such a material adverse effect on the net worth, financial condition or results of operations of the Companies and the Purchasers group (taken as a whole) that the Purchaser may no longer reasonably be expected to consummate the transaction. If the competent merger control authorities in China are prepared to grant approval of the transaction only subject to compliance with specific conditions or obligations, the Purchaser must consider them in good faith, but is not required to accept such conditions or obligations.
Finally, the closing is also conditional on the resolution of certain of the Companies outstanding tax matters, and that the final tax assessments, if any, do not exceed a specified amount.
Rescission and Break Fee
If the closing has not occurred by February 28, 2013, the Sellers (jointly) may rescind the Agreement, unless the Purchaser averts the rescission by issuing a specific notice (the Avoidance Notice).
If the closing has not occurred by May 31, 2013, either the Sellers (jointly) or the Purchaser may rescind the Agreement, and such rescission cannot be averted. In the event that the Agreement so rescinded and the Purchaser had previously issued an Avoidance Notice, the Purchaser must pay the Sellers a 3 million break fee.
Senior Facilities Agreement
The Company and certain of its subsidiaries are parties to a senior facilities agreement dated June 14, 2007, as amended from time to time, with certain financial institutions (the Senior Facilities Agreement). In addition, the Company, as obligor, is a party to a security trust agreement dated June 14, 2007 with the Sellers as security providers and a financial institution (the Security Trust Agreement) and, in connection with the Securities Facilities Agreement and the Security Trust Agreement, the Companies have granted various security interests over their assets as collateral, including the shares of the Subsidiaries (the Collateral Arrangements and, together with the Senior Facilities Agreement and the Security Trust Agreement, the Financing Agreements). On January 1, 2012, the Company was indebted 127 million under the Financing Agreements.
Unless the Purchaser notifies the Sellers by no later than August 31, 2012 that it will continue the existing financing in whole or in part, on the closing the Purchaser must repay amounts outstanding under the Financing Agreements and the Sellers and the Companies will be released from all obligations and liabilities in connection with the Financing Agreements.
Sellers Undertakings
The Sellers agreed that, until the end of 2014, they will not solicit certain key employees of the NUKEM Group for employment and will cause certain key employees not to compete with the business of the Companies.
Guarantee
Cameco guarantees all of the obligations of the Purchaser under the Agreement.
Item 6 Reliance on subsection 7.1(2) or (3) of National Instrument 51-102
Not applicable.
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Item 7 Omitted Information
Not applicable.
Item 8 Executive Officer
Gary M.S. Chad
Senior Vice-President
Governance, Law and Corporate Secretary
Cameco Corporation
(306) 956-6303
Item 9 Date of Report
May 17, 2012
Caution Regarding Forward-Looking Information and Statements
Certain information in Item 4 of this Material Change Report constitutes forward-looking information or forward-looking statements within the meaning of Canadian and U.S. securities laws, including the expectation that NUKEM will significantly reduce the balance of its debt prior to closing, the expected closing date and the effectiveness of the commitments of NUKEMs key personnel to remain with the company. Please refer to Camecos May 14, 2012 news release under the heading Caution Regarding Forward-Looking Information and Statements for a description of the material assumptions which this forward-looking information is based on and the material risks that could cause actual results to differ materially from the forward-looking information. Cameco has provided this forward-looking information to help you understand managements view regarding the acquisition and it may not be appropriate for other purposes. Cameco does not undertake any obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise, except as legally required.