PARIS (Reuters) - French state-controlled nuclear group Areva hopes that China’s CNNC and Japan’s MHI will agree to buy minority stakes in the firm in coming weeks as part of a restructuring of the loss-making firm, Areva’s chairman said on Wednesday.
Under a government-led rescue, Areva is preparing to split off its uranium mining and nuclear fuel activities into a new company, provisionally called NewCo, which will get a 3 billion euro capital increase as part of a 5 billion euro ($5.28 billion) mainly state-funded cash injection.
Areva's AREVA.PA board chairman Philippe Varin told a parliament committee on Wednesday the firm plans to launch the capital increase early in 2017, if possible in January, and hopes it will be subscribed not only by the state but also by strategic investors.
“We are currently working on obtaining a binding offer from strategic minority partners ...in coming weeks,” Varin said.
He mentioned China National Nuclear Corporation (CNNC) and Mitsubishi Heavy Industries (MHI) 7011.T but did not mention Kazakhstan's uranium group Kazatomprom.
On Tuesday, French media reported that CNNC, MHI and Kazatomprom were each set to buy an 11 percent stake in Areva.
“These are big companies that want to be partners of Areva. For us this is a positive element - if we manage to sign a deal of course - because it would demonstrate that they believe in the future of Areva,” Varin said.
Varin specified the talks with possible partners had not yet been finalised and that in any case the French state would retain a majority of more than two thirds of NewCo’s capital.
Areva is years behind schedule on projects in France, Finland and China, and the delays have raised concerns at French utility EDF EDF.PA as it lines up Areva to build two new nuclear plants at Hinkley Point in Britain.
Varin said he hoped the European Commission will give a green light for Areva’s restructuring and state-funded capital increase before the end of the year.
As part of the restructuring, EDF agreed last week to buy Areva’s reactor construction business for 2.5 billion euros ($2.7 billion).
Varin said he expects that sale to be finalised in the second half of next year, but the deal could still come undone as it is conditional on approval from EU competition authorities and on successful completion of the Areva-designed EPR reactor EDF is building in Flamanville, France.
After weak spots were found in that reactor’s pressure vessel, EDF made the takeover of Areva’s reactor unit conditional on nuclear regulator ASN ruling that these flaws do not threaten its safe startup.
Varin said Areva had completed 90 percent of its tests and that he was confident that ASN would declare the reactor safe.
A third condition is linked to a review of some 10,000 manufacturing tracking documents covering a period of about 40 years following the discovery of what the ASN has referred to as falsifications at Areva’s Le Creusot foundry.
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Reporting by Geert De Clercq; Editing by Sudip Kar-Gupta and Adrian Croft
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