Power Engineering - French nuclear agency to sell Areva stake

2 November 2007 - The French state nuclear agency aims to sell 25 per cent of Areva, the biggest builder of nuclear reactors, to help pay for decommissioning of old facilities, according to its chief executive.

Commissariat l'Énergie Atomique (CEA), which owns 79 per cent of Areva, needs about €5bn, ($7.2bn), from the sale to decommission old laboratories and equipment as required by French law, Alain Bugat, the chief executive of the agency, said during an interview in Paris on Tuesday.

Areva, based in Paris, would also need to sell new shares to extend its uranium mining business and ride the global revival in nuclear energy, he said.

The stake sale would be part of a broad shake-up of the French nuclear industry. President Nicolas Sarkozy has asked the finance ministry to review all possible options for Areva, including selling shares to the public or merging it with the power stations maker Alstom.

The state directly or indirectly owns 93.4 per cent of Areva, of which CEA holds the bulk.

CEA was founded by de Gaulle in 1945 to develop nuclear research for defense and civil purposes. The agency's researchers helped France acquire the atomic bomb.

The final decision on the stake sale will come from the government. The state would want to keep a golden share, or an equivalent controlling mechanism, in units that were of strategic importance to France, Bugat said.

These include Areva's nuclear submarines units and the whole nuclear fuel supply chain, from uranium mining to fuel recycling, he said.

Several industrial companies may buy small stakes in Areva, he said. Another scenario could involve a large investor, including an overseas industrial group like Mitsubishi Heavy Industries of Japan, he said. A third option is a full merger with Alstom.

On the subject of a merger with Alstom, Bugat said: "The companies have a similar engineering culture. Their clients are the same. They would benefit from being a larger company."

The chief executive of Alstom, Patrick Kron, has said that he is interested in a merger with Areva. Bouygues, an Alstom shareholder, has also expressed an interest in becoming a significant shareholder of Areva.

Whatever happens, "Areva should try to secure ties with a foreign partner" to be in a better position to win nuclear power station contracts around the world, Bugat said.

Areva has partnerships with Mitsubishi Heavy and Siemens of Germany holds a 34 per cent stake in Areva's reactor unit.

Companies like Areva and Westinghouse Electric of the United States, now owned by Toshiba of Japan, are vying for a bigger piece of a market that is expanding as countries from Britain to China plan to build more nuclear reactors to reduce reliance on crude oil and gas.

Areva will need to sell new shares to expand in uranium mining, Bugat said. Areva plans to triple its investment in uranium mining to take advantage of higher prices and a revival in nuclear power projects.

Add RSS Feed