El Segundo-based Uranium Trading Corp. plans to raise $50 million from an initial public offering, hoping to seize on a global resurgence in uranium prices.
The price range of the shares to be offered is currently expected to be between $10 and $12 per share, according to a prospectus filed with the U.S. Securities and Exchange Commission. The company has applied to list its shares on the New York Stock Exchange under the symbol UTC.
The company has granted the underwriters a 30-day option to buy up to 15 percent of additional shares of stock. Santa Monica-based investment banking company B. Riley FBR Inc. is acting as underwriter.
A spokesman said the company’s stock likely won’t be priced and begin trading until early next year.
Uranium Trading, which wants to sell 375,000 shares, was formed to provide investment opportunities in the civilian uranium market.
The company’s proposition is relatively simple: It sees uranium as an undervalued commodity that will see increased demand in the future. Uranium Trading also plans to purchase uranium with the money it raises in the offering and focus on trading the metal with brokers, utilities and other parties that use the commodity.
Uranium prices have jumped on the metals spot market by 40 percent since April, to nearly a two-year high following an overdue reduction in supply, said Jonathan Hinze, president of UxC, a Roswell, Ga.-based market research and analysis company focused on the nuclear industry.
The metal’s price closed last week at $28.50 per pound, according to UxC, which also operates as a quasi metal exchange.
Prices fell early last year due to oversupply, according to Hinze, but rose to $29.10 – a high for the year – at the end of November. The price jump was related to major cuts in uranium mining at Cameco Corp.’s McArthur River and Key Lake milling operations in northern Saskatchewan, Canada, and Inkai Operation in the Republic of Kazakhstan.
Cameco, which is based in Saskatoon, Saskatchewan, is the world’s second largest producer of uranium, according to the company’s website. It produced 24 million pounds of uranium in 2017.
Another reason for the upward movement in uranium prices is attributed to a new market player, Yellow Cake, which went public in 2018. The U.K.-based firm purchased large volumes of uranium and began stockpiling the metal.
“Hedge funds then entered the market, betting on prices going up. The commodity is ripe for an upside,” said Hinze, who pointed to burgeoning growth for uranium fuel for nuclear reactors in China, South Korea, India and Saudi Arabia.
The majority of trades in the uranium market are driven by utilities, which use it for fuel needed to power nuclear reactors; producers who mine the metal; and trading companies, such as Uranium Trading, Yellow Cake and Toronto-based Uranium Participation Corp., according to Hinze.
Uranium Trading’s principal executives are the company’s co-founder and Chief Executive David Berklite, a 30-year veteran in the uranium industry; and its co-founder and CFO Markus Kemmerer, a 15-year veteran in the industry.
They declined to be interviewed because the IPO is in a quiet period prior to the company trading publicly.
Financial details provided by the startup as part of its prospectus show the firm had little on its balance sheet. Uranium Trading had net operating losses of $79,511 for the three months ended June 30 and assets of $751,875.
CREO Advises on 495 Purchase
Sawtelle-based investment banker CREO Montminy & Co. advised on the Good Life Networks Inc.’s purchase earlier this month of 495 Communications, an advertising and content marketing company with coastal operations in New York and Santa Monica.
Vancouver-based Good Life is an advertising technology company.
Terms of the financial deal were not disclosed.
New York City-based accounting firm CohnReznik said 495 Communications, which was advised on the transaction by CREO and downtown-based Foundation Law Group, reported trailing 12-month revenue as of Aug. 31 of $14.4 million and adjusted earnings before taxes of $1.9 million.
Have a deal tip? Pat Maio can be reached at [email protected] or (323) 556-8329.
