Tuesday June 30, 04:03 PM
France's Areva to raise capital, sell unit
PARIS (AFP) - French nuclear giant Areva (Paris: FR0004275832 - news) will boost its capital by 15 percent and sell its transmission and distribution unit in a bid to raise money for massive investments, trade union sources said Tuesday.
"Areva's supervisory board has just announced a capital opening at the level of 15 percent" and the "the sale of Areva T&D is still on the cards," the Federal Union of Nuclear Trade Unions (UFSN CFDT) said in a statement.
A source close to the matter later confirmed that the state-controlled company's board had backed the capital increase and the sale of the unit.
The capital opening would appear to reduce the state holding in Areva to 78 percent from its current level of 90 percent.
UFSN CFDT said it opposed the move, arguing that it was "a rampant privatisation of nuclear operations" since it would dilute the state's share.
Areva said it would make an official announcement following the close of trade on the Paris stock exchange at 1530 GMT.
Areva needs between eight billion and 10 billion euros (11.2 billion and 14.0 billion dollars) by 2012 to fund its investment programme, notably to develop its third-generation EPR nuclear reactor.
The company also needs an estimated two billion euros to buy out Siemens (Xetra: 723610 - news) ' stake in Areva NP, its reactor subsidiary.
Areva is a world leader in nuclear power with manufacturing facilities in 43 countries and President Nicolas Sarkozy has trumpeted his country's nuclear know-how to win new business abroad.
The Financial Times reported earlier that the French government was preparing a capital increase and could sell a 15-percent stake to Asian and Middle Eastern investors for two billion euros (2.8 billion dollars).
The FT reported Mitsubishi Heavy Industries (MHI), Areva's Japanese partner, was set to take a stake in the French company. MHI told AFP it had not received an offer to buy a stake but would study such a proposal.
The French government is also in talks with sovereign wealth funds such as Mubadala of Abu Dhabi over their participation in a capital increase, which will be launched later this year, the FT said.
France produces most of its electricity from nuclear power and French energy groups like EDF (Paris: FR0010242511 - news) , Total and GDF Suez (Paris: FR0010208488 - news) have previously been touted as possible investors in Areva.
The report comes amid growing interest in nuclear power around the world, sparked by fears of climate change, worries about the reliability of supplies from the Middle East and Russia and record high oil prices in 2008.
The International Atomic Energy Agency expects that at least 70 nuclear power stations will be built around the world in the next 15 years, doubling the global supply of nuclear energy.
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