Ultra Safe Nuclear Corp., a startup that had planned to build a small nuclear reactor in Ontario in partnership with two of Canada’s most prominent nuclear companies, announced it intends to sell its assets under Chapter 11 of the U.S. Bankruptcy Code.
In filings to the U.S. Bankruptcy Court for the District of Delaware, the company reported that it hired an investment bank, Intrepid Investment Bankers LLC, in August to approach dozens of potential lenders. But it had only managed to negotiate a US$23-million debtor-in-possession loan facility. It attributed that outcome to its lack of operating history, and saw few prospects for achieving a better deal.
“After carefully exploring all available options, we have decided that this court-supervised sale process offers the best path forward,” chairman Kirk Edwards said in a statement.
UNSC’s financial difficulties represent a blow to a joint initiative between the federal government and Canada’s nuclear industry to deploy small modular reactors (SMRs) across this country, and suggests the difficulties of raising private capital to finance such projects.
Ottawa-based Global First Power, one of UNSC’s subsidiaries, had proposed to construct a five-megawatt nuclear reactor marketed by UNSC, the Micro Modular Reactor (MMR), at Chalk River Laboratories in Deep River, Ont., along the shore of the Ottawa River. (It would have been a very small reactor: SMRs have capacities up to 300 megawatts.) It had been billed as the first commercial deployment of an SMR in Canada, as well as the country’s most advanced SMR project, and was to enter service by 2026.
“No other organization is closer to constructing a micro reactor in Canada than we are,” Francesco Venneri, UNSC’s then-CEO, declared in 2020.
Ontario Power Generation, the dominant power generation utility in Ontario, signed on as a joint-venture partner and said the micro-reactor market represented a growth opportunity. Canadian Nuclear Laboratories, which manages the Chalk River facility and sought to establish the site as a hub for SMR development, offered to provide research and development support.
The Chalk River project comprised one of three streams in the SMR Action Plan, a plan drawn up largely by the nuclear industry and endorsed by the federal government. It was intended to demonstrate how very small reactors could replace diesel generators and supply off-grid power and desalination in remote communities.
However, progress at Chalk River soon stalled.
In 2021 UNSC began a prelicensing review for the MMR with the Canadian Nuclear Safety Commission. However, the CNSC described that process as being “on hold” on its website on Wednesday. An environmental assessment for the project has been in progress for several years but remains in an early stage. The project was counting on federal funding but had yet to receive any.
OPG exited the Chalk River project in late August by signing a separation agreement from Global First Power.
“Prior to USNC’s bankruptcy filing, OPG made a mutually agreeable decision to transfer its interest in GFP to USNC,” OPG spokesperson Neal Kelly wrote in a statement. “USNC is now solely responsible for the company and the Chalk River Project.”
Headquartered in Oak Ridge, Tenn., UNSC was founded in 2011 to commercialize a proposed nuclear fuel but soon branched out into reactor development. It marketed the MMR as a meltdown-proof reactor inspired by the disaster at the Fukushima Daiichi nuclear power plant in Japan in 2011. In addition to the Chalk River project, UNSC also planned to build a research reactor at the University of Illinois at Urbana’s campus, and was involved in another project supported by the British government. The company recently employed 55 people.
In its court filings, UNSC said it carried US$72.7-million in debt, had sustained continuing operating losses and faced “severe liquidity issues.” It had received continuing support from its most significant investor, U.S. venture capitalist Richard Hollis Helms, and his family, but Mr. Helms died in May.
UNSC’s efforts to attract additional investment had failed, apart from a single US$18-million infusion from an unnamed Canadian labour pension fund. The company also disclosed a US$750,000 loan from Michael Lee-Chin, a prominent Canadian investor who has lately invested in the nuclear industry.
UNSC is the latest SMR vendor active in Canada to encounter financial and operational turbulence.
ARC Clean Technology Canada, based in New Brunswick, lost its chief executive officer and much of its staff in June – developments the company attributed to the pending completion of a prelicensing process it had been engaged in with the CNSC. That process still hadn’t been completed as of Wednesday, according to the CNSC’s website.
