NuScale laying off majority of workers
By Erik Siemers, Business Journal staff writer
Business Journal staff writer
NuScale Power Inc. on Friday expects to lay off a majority of its remaining 70 workers after its hopes for a critical piece of funding fell through.
The Corvallis-based startup, which is developing scalable nuclear reactor technology, is on the hunt for new financial backing after its primary investor’s assets were frozen as part of a federal U.S. Securities & Exchange Commission probe.
A federal judge last month gave a receiver in the case the authority to issue loans to companies, including NuScale, that were expecting payments from the Stamford, Conn.-based Michael Kenwood Group.
But NuScale Chief Financial Officer Bruce Landrey said the receiver on Monday decided not to approve the loans to the company.
NuScale had been hoping to receive $5 million, which Landrey said would have been enough to keep the company going for four to five months, long enough to put together long-term funding and keep its work force employed.
Now that the funding fell through, NuScale — which had already furloughed 30 other workers — will scale down to between 15 and 25 workers, though the exact number hasn’t been determined.
“We will continue with a core group of employees working toward securing both interim financing, long-term financing and continuing progress on our commercialization and licening efforts,” Landrey said.
The SEC claims that Francisco Illarramendi, the Kenwood Group’s majority owner, misappropriated some $53 million from a pair of hedge funds controlled by the Kenwood Group into bank accounts he personally controlled and then made unauthorized investments in long-term private equity deals.
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