NuScale furloughs 30 workers
By Erik Siemers, Business Journal staff writer
Business Journal staff writer
Paul Lorenzini, NuScale
Starting Tuesday, NuScale Power will furlough 30 employees and issue pay cuts to the remaining 70 workers as the company continues to hunt for new funding.
Corvallis-based NuScale, which is developing modular reactors for nuclear power plants, on Jan. 20 said it was halting most of its operations after its primary investor was hit with a lawsuit by the U.S. Securities and Exchange Commission.
The SEC complaint centers on the activities of Francisco Illarramendi, the majority owner of the Stamford, Conn.-based Michael Kenwood Group, which is NuScale's principal investor.
The SEC claims Illarramendi 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.
Though NuScale isn't mentioned by name, the complaint said Illarramendi invested $23 million in an unnamed West Coast-based nuclear energy company that was due a $5 million cash infusion this month to cover operational expenses.
Founded in 2007 out of Oregon State University, privately held NuScale has raised $37 million in venture capital. It has identified the Michael Kenwood Group as its primary investor since early 2010.
Without access to its funding, the company has been on the hunt for new investors.
NuScale Chief Marketing Officer Bruce Landrey said via e-mail Monday that the company’s discussions with prospective investors “are going well.”
“We remain highly optimistic,” he said. “The challenge, as always, is timing.”
The company’s furloughed employees work out of its Corvallis and Portland offices. It has also moved several of its 100 employees to half-time.
“NuScale has attracted the best talent in the industry and we sincerely regret that we are forced to take these actions,” CEO Paul Lorenzini said in the news release. “We need to take every possible step to conserve our cash on hand while we secure stable, long-term financing.”
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