nuclear-news

AREVA nuclear company in the economic doldrums

Drumming up investor interest in such a politically sensitive business has proved tough……………..there are good industrial reasons why even long-term investors are wary of Areva. ….. growth in new nuclear capacity is sluggish.

Areva Capital Raise Is Just a Stopgap – WSJ.com,

By MATTHEW CURTIN

14 Dec 10, Selling 15% of Areva to strategic investors was supposed to herald a fresh start for France’s state-owned nuclear-technology champion after years of dithering. Instead, the government has come up with a temporary fix in raising €600 million ($794 million) by selling just 4.8% to Kuwait’s sovereign-wealth fund. Getting more strategic investors on board next year may be difficult given doubts about Areva’s long-term strategy.Areva, valued at €11 billion, certainly needs a capital boost. It had net debt of €5.2 billion as of June 30, equivalent to 10 times this year’s forecast earnings before interest, taxes, depreciation and amortization, or Ebitda. Delays and cost overruns have led to €2.6 billion in provisions for the nuclear plant it is building in Finland.

Capital spending is running at more than €2 billion a year, twice forecast 2011 and 2012 Ebitda. Buying Siemens out of a joint venture will cost another €2 billion by 2012.
Drumming up investor interest in such a politically sensitive business has proved tough……………..there are good industrial reasons why even long-term investors are wary of Areva. Outside of China, growth in new nuclear capacity is sluggish. Areva’s new-generation reactors are too expensive and too big for many potential customers.

HEARD ON THE STREET: Areva Capital Raise Is Just a Stopgap – WSJ.com

December 14, 2010 - Posted by Christina Macpherson | business and costs, France