In early 2016 the Company embarked on a restructure of GLE, necessitated by the decision of majority shareholder, GEH to exit GLE due to changing business priorities and difficult market conditions. In April 2016, Silex signed a Term Sheet with GEH securing an exclusive option to acquire GEH's 76% interest in GLE, and the right to assign in part or in whole the acquisition terms to third parties.
An extensive search for new investors to take GLE forward with Silex potentially holding a small minority interest was conducted. Given the difficulties in finding new investors in a risk-averse market, in August 2017, Silex amended the Term Sheet it had previously signed with GEH with a view to acquiring all of GEH's 76% interest in GLE.
Despite being at an advanced stage in negotiations with GEH and discussions with other stakeholders with regard to the GLE restructure, the Board decided that there remained too many risks associated with GLE's business case, and that the investment in GLE and the ongoing expenditure that this would entail would not be in the best interests of shareholders. Accordingly, the Company announced on 12 June 2018 that it had terminated the Term Sheet with GEH with regard to Silex potentially acquiring GEH's 76% interest in GLE.
A key objective in the GLE restructure was to enable the Company to create new opportunities by becoming more directly involved in the SILEX technology commercialisation program and in GLE's business development path. In particular, the Company places considerable value in Paducah, Kentucky commercial plant opportunity, which remains underpinned by a 2016 Agreement signed between the US Department of Energy (DOE) and GLE for the re-enrichment of hundreds of thousands of tons or tails inventories using the SILEX technology.
The company continues to assess various options to preserve value created in GLE over the last decade, including the Test Loop demonstration facility and associated intellectual property based in Wilmington, North Carolina. However, in view of the depressed state of the global nuclear fuel markets, any preservation plan will necessarily involve either a significant reduction in US-based activities, or a cessation of all US-based activities and repatriation of the SILEX technology to Australia.
Whilst the outcome of the GLE restructure remains uncertain, technology development activities continue on a reduced scale at our Lucas Heights facility.