Unfortunately for its shareholders, the Paladin Energy Ltd (ASX: PDN) share price won’t be going anywhere any time soon.
This morning the uranium production company’s board announced that it has appointed administrators.
Why have administrators been appointed?
On July 10 Paladin is required to pay Electricite de France (EDF) approximately US$277 million under a long term supply agreement signed in 2012.
The company had requested EDF to grant a standstill to allow time for its Alternative Restructure Proposal to be implemented.
However, EDF has informed Paladin that it is not prepared to enter into a standstill agreement and requires payment of the amount when it becomes due on 10 July 2017.
As a result, the board met today and resolved to appoint administrators.
Administrators will now undertake a financial and operational assessment and intend to continue to operate the company on a business as usual basis until further notice.
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Motley Fool contributor Motley Fool Staff has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.