French Nuclear Firm Details $9 Billion Refinancing, Shake-Up
June 15 2016 - 3:40AM
Dow Jones News
PARIS—France's state-controlled Areva SA detailed plans to raise
as much as €8 billion ($9 billion) from shareholders and asset
sales in a wide-ranging restructuring of the beleaguered
nuclear-engineering group after five consecutive years of
losses.
Chief Executive Philippe Knoche said on Wednesday that the
company would be split into three, with peripheral businesses put
on the block.
Areva will create a new company, temporary named New Co, that
will handle nuclear fuel for power plants. As previously announced,
Areva's reactor-manufacturing unit will be taken over by French
state-controlled power utility Electricite de France SA.
Areva itself will remain as a holding company and will directly
handle the project to build a much delayed nuclear reactor in
Finland that has accumulated multibillion-euro losses over the
years.
"New Co will be an attractive company that will raise interest
from new investors," Mr. Knoche said in a conference call,
insisting the growth of the nuclear industry and the closure of old
power plants will increase the demand for both nuclear fuel and for
nuclear waste handling.
The dismantling of Areva is the last step of a multiyear plan
driven by the government to rescue the country's nuclear sector
that was once a source of national pride for France.
In recent years, Areva has lost ground to competitors from
Russia, South Korea and the U.S. while demand for new nuclear
reactors has plummeted following the Fukushima nuclear disaster in
Japan in 2011
The government, which owns around 85% in Areva, will inject €5
billion in the different parts of the company. Areva will seek to
raise €2.9 billion from the sale of units that make
nuclear-submarine engines, wind turbines and nuclear reactors for
research, after the sale of a majority stake in its commercial
nuclear-reactor making unit to EDF.
Areva has lost money for the past five years, dogged by the
tough market conditions that made it more difficult to recover from
a number of poor investment decisions over the past decade and big
cost overruns on projects in France and Finland.
Company officials had said last year, Areva needed €7 billion to
get back on its feet. The company has booked at €2 billion loss
since then.
Mr. Knoche said he expect the whole process to be over by the
end of 2017, provided the European Commission, the European Union's
executive branch, approves further state support for the
company.
Write to Inti Landauro at inti.landauro@wsj.com
(END) Dow Jones Newswires
June 15, 2016 04:25 ET (08:25 GMT)
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