WASHINGTON - The Board of Directors of the United States Enrichment Corporation (USEC) announced today that, as directed by President Clinton, they are initiating the process to sell USEC, a government-owned corporation that enriches uranium fuel for commercial nuclear energy plants.

The privatization of USEC will be undertaken through a Dual-Path process -- simultaneously pursuing a merger and acquisition (M&A) transaction with a third party and an initial public offering (IPO) of common stock. If all the statutory criteria for USEC's privatization are met, the path that best meets the criteria will be selected by the Board as the method for final sale of the Corporation. Morgan Stanley & Co. Incorporated is the Transaction Manager for the sale, which is anticipated to be completed in 1998. J.P. Morgan Securities, Inc. is the Corporation's financial adviser.

In launching the process, William J. Rainer, Chairman of the USEC Board, said, "we are now undertaking the final phase of the mission that Congress and President Clinton assigned to the USEC Board of Directors -- transferring this function to the private sector, where it belongs."

Rainer also noted that, "after four years of stewardship, the Board's final tasks will be to consider all of the statutory criteria pertaining to the sale, weigh all of the factors and then decide which path is in the best interests of the government for privatizing the Corporation."

The USEC Board of Directors' evaluation of the M&A and IPO paths will be governed by the Energy Policy Act of 1992 and the USEC Privatization Act of 1996. The Board, in consultation with other appropriate federal agencies, must determine that the privatization transaction meets the requirements of the Energy Policy Act governing the sale. The USEC Board, with the approval of the Secretary of the Treasury, will select the method of privatization, establish its terms and conditions, and implement it in a manner that also meets the requirements of the USEC Privatization Act.

USEC Board members are appointed by the President and confirmed by the Senate. No USEC officers or employees are members of the Board. All current USEC Board members have agreed that after privatization they will not serve on the Board of any successor corporation.

Commencement of the Dual-Path sale process simultaneously begins both the M&A process and preparations for an IPO. Several activities will initiate the M&A path, including a notice in the Commerce Business Daily and distribution by Morgan Stanley of a preliminary information package to qualified potential acquirers of the Corporation. At the same time, preparations will also commence for a possible IPO in accordance with the Securities Act of 1933, and the rules and regulations of the Securities and Exchange Commission (SEC).

Federal securities laws impose a "quiet period" that limits public dissemination of information about USEC prior to the time when USEC securities are first sold to the public.

Following privatization, the U.S. government will continue to monitor USEC's activities pertaining to national security and other matters, including its role as Executive Agent in the Megatons to Megawatts agreement with the Russian government. USEC's plant operations will continue to be regulated by the U.S. Nuclear Regulatory Commission.

USEC, a global energy company, is the world leader in production and sales of uranium fuel enrichment services for commercial nuclear energy plants. With fiscal year 1997 revenues of about $1.6 billion, USEC has customers in 14 countries. Its operations include approximately 5,000 people. With headquarters in Bethesda, Maryland, USEC manages enrichment plants in Kentucky and Ohio, and is developing an advanced laser enrichment technology at facilities in California.

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