Areva backs $1.19bn Kuwait investment plan
Paris, December 11, 2010
Areva's supervisory board has approved a 900 million euro ($1.19 billion) capital increase that will see Kuwait taking a near 5 per cent stake in the state-owned French nuclear reactor maker.
Saturday's decision concluded months of talks plagued by political and industrial setbacks as France weighed its funding options for a state-controlled company it regards as a showcase of the country's technological expertise.
Areva's board members formalised proposals announced by the French government on Friday, which will see the Kuwait Investment Authority (KIA) invest 600 million euros and France inject another 300 million euros in the nuclear group.
This should help Areva fund a 12-billion-euro investment plan needed to develop a new generation of nuclear reactors and expand its operations worldwide at a time when higher oil prices have led several countries to reconsider nuclear power plans.
France and the KIA agreed on a shareholders' pact, under which KIA has to remain in Areva's capital for at least 18 months and the French government commits to floating ordinary shares on the market during the first half of 2011.
Chief Executive Anne Lauvergeon has been pushing for a stock market listing for years. Plans for a partial privatisation were shelved in 2005 by then Prime Minister Dominique de Villepin, a rival in the same party as current President Nicolas Sarkozy.
About 4 percent of Areva's capital currently trades on the Paris stock exchange in the form of investment certificates that give their holders no voting rights.
The KIA will not sit on Areva's supervisory board, said Areva, adding the deal will be put to vote at a special shareholder meeting on December 23.
Areva also confirmed its 2012 financial goals for sales of 12 billion euros, double-digit operating margin and 'significantly' positive free operating cash flow.
The French government has direct and indirect stakes amounting to just over 90 percent of Areva, which was created from a merger in 2001 of state-owned uranium mining and enrichment firm Cogema and nuclear reactor maker Framatome.
The 900-million-euro rights issue is expected to be followed by a second capital increase in the first half of 2011, which Areva hopes will raise some three billion euros in total.
Areva has separately sold its power transmission and distribution business (T&D) to Alstom and electric equipment company Schneider Electric for 4.1 billion euros.
It also raised one billion euros by selling its stakes in oil major Total and French utility GDF Suez, and sold its stake in French defense group Safran for a reported 600 million euros.-Reuters