France’s APE Chief Sees No EU Ruling On Areva Rescue Before 2017
The European Union competition authorities are not expected to rule on a rescue plan for French energy company Areva before summer of 2017, the head of French state holding agency APE said on Wednesday.
The European Commission opened an investigation into the rescue package in July and Areva was hoping to get the EU’s green light next month so it could launch a capital increase in early 2017.
APE chief Martin Vial said on French news channel BFM Business that the Commission’s review of EDF’s project to acquire Areva reactor unit Areva NP would take several months.
“I doubt that we will have an answer before the summer or autumn of 2017,” Vial said.
Under the terms of a government rescue package struck in January, France would take part in a 5 billion-euro ($5.5 billion) capital increase for Areva, in which EDF would also buy a majority stake in Areva’s nuclear reactor unit Areva NP.
EDF had agreed last year to buy a majority stake in Areva NP and had said it was open to foreign investors to acquire minority stakes.
APE is the state holding company through which France owns 87 percent of Areva and 85 percent of EDF.
Vial said that as part of a nuclear industry refinancing package, EDF would go ahead with a 4 billion euro capital increase of which the state would subscribe for 3 billion euros.
Areva “NewCo”, which will focus on uranium mining and nuclear fuel, would get a 5 billion euros capital increase, of which the state would provide 4 to 4.5 billion euros, Vial said. The remainder would come from foreign investors.
“We are negotiating with third-party investors; Chinese and Japanese, and with a Kazakh company. We are discussing the percentages,” Vial said.
Vial said APE would need financing of 7-8 billion euros.
“That is provided that we get EU commission clearance,” he said.
Areva said in late 2015 it had signed a memorandum of understanding with China National Nuclear Corporation about taking a minority stake in NewCo.
Earlier this month, the government also said Areva was in talks with Kazakhstan uranium mining company Kazatomprom about a potential investment in Areva.
Mitsubishi Heavy Industries, which in June struck a deal with EDF to possibly take a minority stake in Areva NP, might also consider one in NewCo.
Any delay in the planned rescue could force Areva to call on the state for a shareholder loan to repay a 1.2 billion euro bridging loan expiring in January.
Industry experts say this increases the risk Areva’s rescue will be delayed till after the May 2017 presidential election.
(Reporting by Geert De Clercq; Editing by Mathieu Rosemain and Jane Merriman)