French state-controlled nuclear group Areva (CEI.FR) has already started talks with potential investors for its planned capital increase, a source close to the company told Dow Jones Newswires late Friday. The group, which is 87%-owned directly and indirectly by the French state, considers partially opening its capital to foreign investors as part of its plans to increase its fundings as it is faced with important financial needs.

Yet, no schedule has been set for the capital increase, the person said. The person also declined to say who the potential investors are. Japan's Mitsubishi as well as Gulf-based sovereign funds have been reported to be interested in buying a stake.

Earlier this year, a source close to the French government told Dow Jones Newswires that it would allow Areva to open its capital to other investors, and increase it by around 15%.

As for the current selling process of power distribution unit Areva T&D, the due diligence phase has started with the three bidders - a consortium of Alstom SA (ALO.FR) and Schneider Electric SA (SU.FR); Japan's Toshiba Corp. (6502.TO, TOSYY); and General Electric Co. (GE) teaming up with CVC Capital Partners now consulting the company's data. "We opened the data room for them. Now we're waiting for their binding offer," the person said.

The main criteria are the price, the industrial project and social considerations, the person confirmed. Not only must the price match the value of T&D, but bidders must also have valid development plans for the unit and the French government will keep a close eye to the consequences of any transaction for T&D's employees, the person explained.

The French group expects binding offers to be made by mid-November. and although Areva clearly stated that it could reject all offers if deemed unsatisfactory, "we're very confident that we will get a fair price and a fair offer," the person also told Dow Jones Newswires.

Areva is faced with multiple financial needs. The former partner in its nuclear production unit, Germany's Siemens AG (SI, SIE.XE) has asked to be bought out, for an estimated amount of EUR5 billion, while the development of new-generation nuclear reactors, or EPR, in Finland, France and China, is proving very costly.

-By Geraldine Amiel, Dow Jones Newswires; +33 1 40171740; geraldine.amiel@dowjones.com