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Billingham To Chair Urenco As Sale Stalls

A former finance director of British Energy is being lined up as the interim chairman of Urenco, the state-owned uranium enrichment group, as the prospects of an imminent £10bn privatisation recede.

Sky News understands that Stephen Billingham, who sits on the board of Urenco as a non-executive director, is likely to replace Sir John Hood on a temporary basis when he steps down in the coming months.

Mr Billingham is a logical candidate, given his experience at British Energy.

He also chairs Anglian Water Group and is a director of Balfour Beatty (Other OTC: BAFBF - news) , the infrastructure firm.

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The change of leadership comes as British Government officials continue to make efforts to resolve a deadlock surrounding the potential sale of Urenco.

The company is jointly owned by the UK and Dutch governments, and two state-backed German utilities.

Sources said the financial challenges facing Germany's biggest energy companies were among the factors preventing them prioritising the sale of Urenco, while Dutch political opposition has also been a factor in the past.

Despite ministers previously identifying Urenco as a privatisation candidate, the company was omitted from a list of publicly owned assets for sale that was disclosed in Wednesday's Autumn Statement and Spending Review.

That list did include the Government's remaining stake in National Air Traffic Services, the Land Registry and Ordnance Survey.

John McDonnell, the shadow chancellor, said on Thursday that the prospect of "foreign powers" owning parts of the UK's nuclear industry and air traffic control operations was unpalatable.

The Shareholder Executive, which manages state-owned assets, had approached Sir Dick Olver, the former BAE Systems (LSE: BA.L - news) chairman, about taking on the Urenco chairmanship.

Sources close to the company said, however, that the lack of meaningful progress towards a sale was likely to have deterred Sir Dick from accepting it.

Last month, British, Dutch and German officials held talks aimed at unblocking the logjam which has prevented Urenco's privatisation.

A spokesman for the Department of Business, Innovation and Skills told Sky News in October: "No final decision has been made by the British Government on the sale of its shares in Urenco.

"We continue to move forward with preparations for the sale of our shareholding.

"Any sale of our shareholding will be contingent on safeguarding our security and non-proliferation interests, and delivering value for money for the UK taxpayer."

A sale of Britain's stake could raise as much as £3bn, according to analysts.

A stock market flotation of the company, as well as bids by nuclear industry participants and private equity groups, have all been mooted during years of tortuous negotiations between the shareholders.

As well as a successor to Sir John, Urenco also needs a new chief executive to replace Helmut Engelbrecht.‎ Both men will remain in place until new appointments are made.

Urenco's technology and assets are so sensitive that its current owners will impose strict safeguards on any future shareholders.

A privatisation of the company, which is based in the UK, could generate proceeds larger than virtually any other non-bank asset sale by the British Government for many years.

Urenco's activities are governed by the Treaties of Almelo, Cardiff and Washington, which were drawn up in an attempt to control the proliferation of nuclear technology and stop enriched uranium from falling into the hands of terrorists.

Tepco, the Japanese energy group, was seen as an obvious buyer of Urenco until the devastating earthquake and tsunami in 2011 triggered a crisis at the Fukushima reactor.

Cameco (Swiss: CCO.SW - news) , a Canadian uranium producer, Mitsubishi (LSE: 7035.L - news) of Japan and Areva (Paris: FR0011027143 - news) , the French nuclear group, are among those expected to bid.

Several private equity groups, including Apax Partners, Carlyle and KKR, have also assessed the prospect of submitting offers.

A number of investment banks have won roles on the deal, with Morgan Stanley (Xetra: 885836 - news) , the Wall Street firm, advising the UK Government.

The two German utilities backed by Berlin are being advised by Bank of America Merrill Lynch, while ABN Amro is working with the Dutch government.

Urenco announced in August that half-year profits had soared to €480m (£352.8m) on revenue of €586.6m.

Mr Engelbrecht said the figures reflected a "strong operational performance" but that the company continued "to experience challenging conditions in the global nuclear fuel market".