The enzyme catalyses a net dephosphorylation and oxidation of UMP to generate 5′-dehydrouridine, the first intermediate in the biosynthesis of the unusual aminoribosyl moiety found in several C7-furanosyl nucleosides such as A-90289s, caprazamycins, liposidomycins, muraymycins and FR-900453. Requires Fe2+.