27 Jan (NucNet): EDF has agreed a significant investment Areva’s reactor business with its board yesterday approving plans to take a controlling stake in Areva NP, valuing the reactor unit at about €2.5bn ($2.7bn).
Areva also separately announced a €5bn capital increase that would be backed by the French state.
EDF confirmed it was contemplating participation of between 51 and 75 percent in Areva NP and that EDF would make a binding offer following the finalisation of arrangements to completely immunise EDF against costs and risks related to the Olkiluoto-3 EPR project in Finland.
Areva said it planned to keep a strategic interest of at least 15 percent in Areva NP.
The valuation includes a price supplement mechanism that is pegged to Areva NP’s financial performance over 2017-2018 and that could amount up to €350m. The valuation could be adjusted – higher or lower – according to Areva NPs financial statements at the date of the transaction’s completion, Areva said. EDF said the proposed amount of €2.5bn is “likely to be adjusted”.
Areva said the impact of restructuring plans aimed at protecting EDF from Olkiluoto-3 risks “remain to be clarified”.
In March 2015 Areva cited asset write-downs and provisions against losses at Olkiluoto-3, which is behind schedule and over budget, as a reason for a record net loss of €4.83bn for 2014. A 2014 agreement between Areva and EDF said that in the event of an agreement for EDF to invest in Areva NP there would be “no transfer of liability” related to Olkiluoto-3.
In December 2015, Areva announced it expected “a heavy loss” in its 2015 financial statements. Yesterday the company confirmed the forecast, explaining it related mainly to restructuring and supplemental costs for Olkiluoto-3.
Areva also said its board had approved in principle a €5bn capital increase to “restore its financial situation”. The company added that the French state, as the leading shareholder, would take part in the capital increase and would “ensure its success”.
A statement on President Francoise Hollande’s website said Mr Hollande had held a meeting with ministers to discuss the overhaul of the French nuclear industry. An overhaul is essential for France’s energy independence and the success of the country’s planned energy transition, the statement said.
Mr Hollande welcomed today’s announcements by Areva and EDF. He confirmed that the French state, as the leading shareholder in Areva, will take part in the €5bn capital increase and “ensure its success in compliance with European regulations”.
Mr Hollande also said preliminary discussions were held with Areva about the restructuring of the ownership of Areva TA, in which the state would become majority shareholder.
Areva TA is the group’s propulsion and research reactors business. Areva has also said firm offers are expected for a planned sale this year of its UK-based subsidiary Canberra, which supplies instrumentation for the nuclear industry.
