France’s desperate move to save nuclear company AREVA

France to buy out Areva shareholders in bid for nuclear fix, http://www.livemint.com/Companies/P2boy0yfvo71EzmyG4zx8O/France-to-buy-out-Areva-shareholders-in-bid-for-nuclear-fix.html Geert De Clercq

France, which owns 87% of Areva, said it would offer €4.5 per Areva SA share to minority investors which include Kuwait’s investment fund and French energy group Total Paris: France will buy out minority shareholders in Areva and delist the troubled nuclear group, the government said on Wednesday as talks with potential investors in a new nuclear fuel company being spun out of Areva neared a conclusion.

The state, which owns 87% of Areva, said it would offer €4.5 per Areva SA share to minority investors which include Kuwait’s investment fund, French utility EDF and French energy group Total.

Areva’s shares have fallen by as much as 90% from their 2007 highs as the group chalked up repeated losses. The stock was suspended on Tuesday at €5.2.

European Union (EU) antitrust regulators approved the French government’s plan to inject €4.5 billion ($4.8 billion) into Areva on Tuesday, saying the rescue would not unduly distort competition.

The ruling will allow Areva, whose capital has been wiped out by years of losses, to restart as a smaller firm focused on uranium mining and nuclear fuel production and recycling.

Legacy Areva SA—the firm left over after this split and the sale of Areva’s reactor unit to state-controlled EDF—will get a €2 billion capital increase and will hold the liabilities related to the troubled Olkiluoto 3 project in Finland, which has been hit by delays.

Areva said negotiations with unspecified investors in the new company were being finalised. It said last month that two investors have made a €500 million ($526.40 million) offer for a combined 10% stake in the new entity.

Paris: France will buy out minority shareholders in Areva and delist the troubled nuclear group, the government said on Wednesday as talks with potential investors in a new nuclear fuel company being spun out of Areva neared a conclusion.

The state, which owns 87% of Areva, said it would offer €4.5 per Areva SA share to minority investors which include Kuwait’s investment fund, French utility EDF and French energy group Total.

Areva’s shares have fallen by as much as 90% from their 2007 highs as the group chalked up repeated losses. The stock was suspended on Tuesday at €5.2.

European Union (EU) antitrust regulators approved the French government’s plan to inject €4.5 billion ($4.8 billion) into Areva on Tuesday, saying the rescue would not unduly distort competition.

The ruling will allow Areva, whose capital has been wiped out by years of losses, to restart as a smaller firm focused on uranium mining and nuclear fuel production and recycling.

A person familiar with the situation said the two investors are Japan’s Mitsubishi Heavy Industries and JNFL. Talks are continuing with China’s National Nuclear Corporation about also taking a minority stake.

“These talks are continuing and focus on governance issues, and on the issue of the balance between the different third-party investor parties,” French industry minister Christophe Sirugue told Reuters in an interview.

Sirugue, who said he had discussed the governance issue with Chinese vice-premier Ma Kai during his visit to France in November, added that the make-up of the board of the new company is another important issue in the talks. Reuters