PREVIEW-Funding plan looms for nuke reactor group Areva-sources
* Areva's financing package unveiled on June 30-sources
* Package to include rights issue, sale of T&D-sources
* Areva needs 11 bln euros for investment, JV stake buyback
By Marie Maitre and Benjamin Mallet
PARIS, June 26 (Reuters) - France is finalising a package of measures, including a capital increase and the sale of a subsidiary, to fill the financing needs of state-owned nuclear group Areva (CEPFi.PA), several sources told Reuters.
A rights issue, a sale of Areva's power Transmission and Distribution unit, estimated at some 4 billion euros ($5.54 billion), the divestment of minority stakes, and debt, are the four steps to bridge an 11 billion euro funding gap, they said.
"A decision will be announced soon on the means to finance the long-term development of Areva," a source close to the matter said, adding this decision may be announced as early as June 30, when Areva next holds a supervisory board meeting.
"A capital increase and/or an opening up of the capital seems to be sure. What remains to be determined is the proportion and who would take part in it," the source added.
Two other sources with direct knowledge of the situation confirmed a rights issue would be an element of the financing package, with one also citing the "very likely" divestment of T&D -- a unit that Areva bought from Alstom (ALSO.PA) for 950 million euros in 2004 as part of the latter's rescue plan.
Areva has long called on its main shareholder, the French state with 93 percent of its capital, to give it the means to fund the development of its businesses, which range from uranium mining to nuclear reactors and the recycling of spent fuel.
In 2005, the government shelved a plan to float up to 40 percent of Areva on the stock market, arguing state control was needed in the strategic nuclear sector. In 2007, President Nicolas Sarkozy called for a review of Areva's future, as high oil prices stoke up demand for civil nuclear power reactors.
No decision was made despite swelling financing needs at Areva, which has plans for 9 billion euro investments by 2012 and must pay at least 2 billion euros to buy back Siemens's (SIEGn.DE) 34 percent stake in a reactor venture.
A capital increase or the sale of T&D have emerged as the main funding options, but in the past, government sources had told Reuters the cash-strapped state was reluctant to bankroll a rights issue, while Areva long resisted the idea of selling T&D.
It now seems both parties have agreed to make concessions, with Areva agreeing to sell its double-digit profit margin T&D business, while the state would agree to see its stake diluted.
