European Commission investigating French government’s financing of AREVA nuclear comnpany

Europe checks French state aid for Areva restructuring, WNN 20 July 2016 The European Commission has launched an investigation to determine whether the French government’s contribution of €4.0 billion ($4.4 billion) towards the financing of the restructuring of Areva meets EU rules on state aid.

In late July 2015, EDF and Areva announced they had signed a memorandum of understanding setting out the principal terms and conditions for EDF to take a majority share in Areva’s reactor business, Areva NP. Areva – which has been experiencing financial difficulties for over five years – plans to create a new group later this year that will bring together all its fuel cycle operations: mining, chemistry, enrichment, recycling, dismantling, logistics and related engineering. And in April 2016 France notified the European Commission of a restructuring plan to return the Areva Group’s competitiveness and improve its financial position. The plan includes state aid in the form of a public capital injection of €4.0 billion. It also involves a renewed focus on the nuclear fuel cycle through various divestments and withdrawal from certain activities.

Areva – in which the French state owns, either directly or indirectly, an 86.5% stake – plans to launch a capital increase by the first quarter of 2017. The company earlier said, “The French state has indicated its intention of subscribing to it and ensuring its complete success, in compliance with European regulations.”

According to European guidelines on state aid for rescuing and restructuring companies in difficulty, aid to rescue such firms can only be granted for up to six months. Beyond this period, aid must either be reimbursed or a restructuring plan must be approved by the European Commission to allow aid for the company’s restructuring. The plan must ensure that the long-term viability of a company is restored without further state support, that the distortions of competition induced by the state aid are addressed by specific measures and that the company contributes to the cost of restructuring. Restructuring aid may only be granted once over a period of ten years.

The European Commission announced yesterday it has opened an in-depth investigation into the French government’s financial contribution to Areva’s restructuring…..http://www.world-nuclear-news.org/C-Europe-checks-French-state-aid-for-Areva-restructuring-2007164.html