SCHEDULE: Fluor Converts NuScale Shares, Plans Major Sale

Fluor Corporation has converted its Class B shares in NuScale Power Corp. to Class A common stock and initiated a sale program for 71 million shares, while also amending a tax agreement.

Summary

• Fluor Corporation and its affiliates have converted 110,936,472 Class B common units and corresponding Class B shares of NuScale Power Corporation into Class A common stock.
• NuScale Holdings Corp., another Fluor affiliate, previously converted 463,747 Class B units into Class A shares on October 22, 2025.
• Nuke Holdings, LLC, a wholly-owned subsidiary of Fluor Enterprises, has entered into an agreement with Goldman Sachs International to sell 71,000,000 shares of NuScale Class A Common Stock at a variable price.
• This sale program is expected to be completed in the first quarter of 2026 and cannot be terminated by the dealer before January 15, 2026.
• A Tax Receivable Agreement Amendment was executed on November 6, 2025, reducing tax payments due to Fluor from NuScale by 50%, from 85% to 42.5% of the Net Tax Benefit.
• Fluor has committed to vote its shares in favor of increasing the authorized number of NuScale Class A Common Stock up to 662,000,000 shares until January 1, 2027.
• NuScale has agreed to limitations on issuing new Class A shares, restricting sales to no more than 20 million Newly Authorized Shares until February 28, 2026, and prohibiting certain types of underwritten offerings or PIPE transactions primarily for capital raising.
• The prior Exchange and Lock-Up Agreement, dated July 31, 2025, has been terminated.

Sentiment

Score: 4

Explanation: The filing indicates a significant divestment by a major shareholder (Fluor) which could create market overhang and downward pressure on NuScale's stock. While the capital structure simplification and TRA amendment are notable, the large share sale and reduced tax benefits for Fluor suggest a less favorable outlook for NuScale in the short term, despite some positive strategic flexibility gained.

Positives

• Conversion of Class B to Class A shares simplifies NuScale's capital structure and increases liquidity for Fluor's holdings.
• The amendment to the Exclusivity Agreement allows NuScale to pursue projects with ENTRA1 Clients more freely, potentially expanding its market reach.
• Fluor retains the right to bid on engineering, procurement, and project management services for ENTRA1 Client projects, maintaining a potential revenue stream.

Negatives

• Fluor's planned sale of 71,000,000 Class A shares could introduce significant selling pressure on NuScale's stock price.
• The 50% reduction in tax payments to Fluor under the Tax Receivable Agreement means Fluor will receive less cash from NuScale related to tax benefits.
• NuScale's agreement to limit new Class A share issuances to 20 million until February 28, 2026, could restrict its ability to raise capital quickly if needed.

Risks

• Market Overhang: The planned sale of 71,000,000 shares by Fluor's subsidiary could create a significant market overhang, potentially depressing NuScale's stock price.
• Liquidity Risk: Trading limitations imposed on Fluor's transfers (6% of ADTV on Blackout Dates, 3% on Non-Blackout Dates) could affect Fluor's ability to liquidate its position efficiently.
• Regulatory Disruption: The Letter Agreement with Goldman Sachs includes provisions for 'Regulatory Disruption,' allowing the dealer to deem a Market Disruption Event if legal, regulatory, or self-regulatory requirements impact market activity, potentially affecting the sale program.
• Change in Law: The Letter Agreement also details 'Change in Law' as an Additional Disruption Event, which could impact the transaction if new tax laws or regulations affect hedging positions or the transaction's contemplated manner.
• Hedging Disruption: The dealer may terminate the transaction if it cannot establish or maintain hedging positions on commercially reasonable terms.
• Increased Cost of Hedging/Stock Borrow: These events could lead to adjustments or termination of the transaction.
• Insolvency Filing: An insolvency filing by NuScale could lead to cancellation and payment under the Letter Agreement.
• Counterparty Compliance: Nuke Holdings, LLC must strictly comply with 'Separateness Provisions' and other covenants; non-compliance could trigger an Additional Termination Event.

Future Outlook

Fluor's subsidiary plans to complete the sale of 71,000,000 NuScale Class A shares in the first quarter of 2026. NuScale is expected to call special meetings to approve an increase in authorized Class A shares up to 662,000,000, with Fluor committed to supporting this. NuScale also has limitations on its own share issuances until late February 2026.

Industry Context

This filing reflects a significant shift in ownership structure for NuScale Power, a company at the forefront of small modular reactor (SMR) technology. Fluor, a major engineering and construction firm, has been a long-standing investor and partner in NuScale. The conversion of Class B to Class A shares and the subsequent large-scale sale indicate a potential strategic divestment by Fluor, possibly to monetize its investment or reallocate capital. The reduction in TRA payments also suggests a recalibration of the financial relationship between the two entities. The limitations on NuScale's own share issuances could impact its future capital raising flexibility, which is crucial for a capital-intensive industry like nuclear energy development. The amendment to the Exclusivity Agreement with ENTRA1 Clients suggests NuScale is actively pursuing new client relationships and project opportunities, which is a positive for its growth trajectory in the SMR market.

Comparison to Industry Standards

• The conversion of Class B to Class A shares is a common corporate action to simplify capital structures and improve liquidity, aligning with standard practices for publicly traded companies.
• Large block sales by significant shareholders, such as Fluor's planned 71 million share sale, are not uncommon in the market, but the size relative to NuScale's float could be substantial, similar to other early-stage technology companies where initial investors seek to realize gains.
• Tax Receivable Agreements (TRAs) are standard in SPAC mergers, like NuScale's, to share tax benefits from historical tax attributes. The 50% reduction in payments to Fluor is a specific negotiation outcome, not a general industry standard, but amendments to such agreements are part of ongoing corporate finance.
• Voting covenants, like Fluor's commitment to support an increase in authorized shares, are typical in situations where a major shareholder's cooperation is needed for corporate actions, ensuring alignment for future capital needs.
• Limitations on new share issuances by the company itself, while a major shareholder is selling, can be a negotiated term to manage market supply, similar to lock-up agreements in IPOs or secondary offerings.

Corporate Governance

Legal Proceedings

• A release agreement will be executed concurrently with the Exchange Agreement for certain litigation and commercial matters.

Related Party Transactions

• Fluor Corporation (parent) and its subsidiaries (Fluor Enterprises, Inc., NuScale Holdings Corp., Nuke Holdings, LLC) are engaging in transactions with NuScale Power Corporation, where Fluor is a significant shareholder.
• Conversion of Class B shares/units to Class A shares by Fluor and NuScale Holdings Corp.
• Sale of 71,000,000 Class A shares by Nuke Holdings, LLC (a Fluor subsidiary) to Goldman Sachs International.
• Amendment to the Tax Receivable Agreement between NuScale and Fluor, reducing payments to Fluor.
• Amendment to the Exclusivity Agreement between NuScale and Fluor regarding ENTRA1 Clients.

Stakeholder Impact

• Shareholders (NuScale): Potential for increased selling pressure on Class A common stock due to Fluor's large-scale divestment. Simplification of capital structure (Class B to Class A conversion) could improve liquidity and transparency. The commitment to increase authorized shares prepares for future capital needs, but the temporary issuance limits could affect short-term capital raising.
• Shareholders (Fluor): Monetization of a significant portion of its investment in NuScale, providing capital for other corporate purposes. Reduced tax benefits from NuScale.
• Customers (ENTRA1 Clients): The amendment to the Exclusivity Agreement allows NuScale to pursue projects with ENTRA1 Clients more freely, potentially benefiting these clients with NuScale's SMR technology.
• Creditors (NuScale): Reduced tax payments to Fluor could improve NuScale's cash flow, potentially strengthening its financial position.

Next Steps

• Completion of Nuke Holdings, LLC's sale program of 71,000,000 Class A shares in Q1 2026.
• NuScale Power Corporation to call special meetings of stockholders to approve an increase in authorized Class A Common Stock to up to 662,000,000 shares.
• Fluor to vote its Subject Shares in favor of the Charter Amendment proposals until January 1, 2027.
• NuScale, Fluor, and Fluor Enterprises to execute a release agreement for certain litigation and commercial matters.

Key Dates

Recommendation

The filing details Fluor's plan to sell 71,000,000 Class A shares of NuScale Power Corp. through Goldman Sachs, representing a substantial portion of NuScale's outstanding shares. This significant divestment by a major, long-term investor is likely to create considerable market overhang and downward pressure on NuScale's stock price due to increased supply. While the conversion of Class B to Class A shares simplifies the capital structure, the sheer volume of shares entering the market, coupled with a 50% reduction in tax benefits for Fluor, signals a strategic shift by Fluor to reduce its exposure. This could be interpreted by the market as a lack of conviction from a key partner, leading to a negative sentiment and potential price decline. Investors should consider selling to avoid potential losses from this anticipated selling pressure.

Keywords

NuScale Power Corp, Fluor Corporation, Class A Common Stock, Class B Common Stock, Share Conversion, Stock Sale, Tax Receivable Agreement, Corporate Governance, SEC Filing, Schedule 13D, Small Modular Reactors, SMR, Nuclear Energy, Goldman Sachs, Equity Derivatives, Market Overhang