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AREVA’s money troubles: drive to sell its nuclear reactors

FOCUS: Areva Still Needs Cash Despite T&D Sale
CNN Money By Geraldine Amiel, Dow Jones Newswires 4 Dec 09 PARIS Despite selling its transmission and distribution business for EUR4.1 billion, French state-controlled nuclear engineering Areva SA ( CEI.FR) still needs billions more of funding to realize its substantial expansion program.

And to come up with the EUR7 billion or so of additional money for investment, Areva may have to sell more of its family silver, possibly as soon as 2010. “Financing remains an issue,” SGCIB’s analyst Gael de Bray said……

Areva has budgeted around EUR2.6 billion annually for capital expeditures in 2010-2012, as it pushes its leading-edge Evolutionary Pressurized Reactor, or EPR, into markets around the world, Chief Executive Anne Lauvergeon told analysts earlier this week.

The company is aiming to sell around 50 of its EPR reactors globally…….

…. The EPR’s introduction hasn’t been smooth. Beyond industrial investment, Areva faces substantial cost overruns related to its delayed reactor program in Finland, where it is building its first EPR.

The overruns will add to Areva’s financing needs. Areva has booked EUR2.3 billion of charges to cover potential exposure to the Finnish Olkiluoto project. The contract’s initial value to Areva was EUR3 billion, and the on-going feud between Areva and its customer TVO could mean even more cost charges, CM-CIC’s analyst Patrice Lambert de Diesbach said………………..

Areva declined to comment.

Formed from the merger -masterminded by Lauvergon- of several publicly owned nuclear sector entities in 2001, the company has come under criticism and faces some questioning about its role in France’s nuclear ambitions and whether it is suited in its current form to cement a role as the world’s leading nuclear engineering group.

FOCUS: Areva Still Needs Cash Despite T&D Sale

December 5, 2009 - Posted by | 1, business and costs, France | , , , , , , , , ,

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