TOSHIBA, Tokyo Electric Power and the Japan Bank for International Cooperation scrapped a finance deal with Uranium One after Atomredmetzoloto ZAO (ARMZ) of Russia proposed to buy a majority share in the Canadian producer.

The three Japanese companies will have an agreement to purchase as much as 2,5m pounds of raw uranium a year from 2014 to 2025, they said in a joint statement on their websites yesterday. Uranium One will buy back debentures for C$271,79m from the Japanese companies.

Russia's proposed buyout would cut Japanese holdings in Uranium One to about 10% from about 16% now, said Masayuki Kishino, a Tokyo Electric spokesman.

The new agreement guarantees the Japanese companies a steady supply of the ore, while the old agreement allowed them a maximum of 20% of annual output, he said.

ARMZ, a unit of state-run Rosatom, said June 8 it plans to raise its stake in Uranium One to at least 51% from 23% in exchange for $610m in cash and stakes in two Kazakhstan mines. Rosatom wants more uranium to supply reactors it plans to build abroad after Russia announced June 19 it would staff embassies with nuclear officials to win more orders.

The three Japanese companies signed a contract in February 2009 to buy 117m common shares in Uranium One. At the Canadian producer's request, the terms of the deal were amended in December to allow the Japanese investors to buy bonds that can be converted for the same volume of shares.

The Japanese companies expect the sale of the convertible debentures and confirmation of the purchase rights to be effective by December, subject to the completion of ARMZ's acquisition of Uranium One common shares, according to the statement.