Loss-making French nuclear engineering group Areva has announced details of a $9 billion rescure plan.
Loss-making French nuclear engineering group Areva has announced details of its plan to raise up to €8 billion in new financing, in the main from two sources – a capital injection from the French government, provided that the European Commission approves further state support for the company, and from selling assets in a restructuring of the state-controlled engineering group.
The company is to be split into three parts, with peripheral businesses put up for sale. A new company, temporarily named New Co. will be created, to manage the nuclear fuel business. Areva’s reactor manufacturing unit will be taken over by French state-controlled power utility Électricité de France, EDF.
Areva itself will remain as a holding company and will directly manage the project to build the much-delayed nuclear reactor in Finland that has accumulated multi-billion euro losses over the years.
"New Co. will be an attractive company that will raise interest from new investors," said chief executive Philippe Knoche during a conference call, reiterating the company’s belief that the growth of the nuclear industry and the closure of old power plants would increase the demand for both nuclear fuel and for nuclear waste handling.
The dismantling of Areva part of a plan driven by the French government, which has an 85% stake in Areva, to rescue the country’s nuclear sector. In recent years, ‘national champion’ Areva has lost ground to competitors from Russia, South Korea and the USA while demand for new nuclear reactors has fallen following the Fukushima nuclear disaster in 2011.
The government will inject €5 billion into the different parts of Areva. The company will seek to raise €2.9 billion from the sale of its nuclear submarine engine, wind turbine and research reactor units.
Company officials said last year that Areva needed €7 billion to get back on its feet, but since then the company has booked a €2 billion loss. Mr. Knoche said he expects the entire process to be completed by the end of 2017.