by Staff Writers
Paris (AFP) Jan 28, 2016
Areva said Wednesday it plans a five billion euro capital increase to stabilise its finances, as the struggling French nuclear giant seeks to finalise the takeover of its reactor arm by rival EDF.
Paris, Areva's largest shareholder with an 87 percent stake, will take part in the capital increase and act as a guarantor for its success, the company said in a statement.
"The board of directors... approved the principle of a capital increase envelope of 5 billion euros ($5.4 billion), which aims restore the group's balance sheet," Areva said in a statement.
"The French state, as the leading shareholder, will take part in this and will ensure its success."
Areva also predicted it would book a net loss in fiscal 2015 for a fifth consecutive year, as the jewel in the crown of France's huge nuclear energy industry struggles with mounting costs and a huge debt pile.
Demand for nuclear power has slumped since the 2011 Fukushima disaster in Japan, and Areva has been hit by cost overruns and difficulties building new reactors in Flamanville, northwestern France and in Finland.
Seeking to keep the once world leading nuclear energy company alive, France has been pushing it to work more closely with state-backed electricity utility EDF, which in July agreed to buy Areva's nuclear reactor unit.
Areva said Wednesday the deal with EDF would value its Areva NP arm at 2.5 billion euros for the entire unit, less than the 2.7 billion agreed last year. Then, EDF said it would buy between 51 and 75 percent of the unit.
The deal is expected to be finalised in 2017, subject to approval by authorities.
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