Areva board backs Kuwait, France investment

PARIS — Areva’s supervisory board approved a €900 million ($1.19 billion) capital increase that will see Kuwait taking a near five per cent stake in the state-owned French nuclear reactor maker.

By (Reuters)

Published: Sun 12 Dec 2010, 11:16 PM

Last updated: Mon 6 Apr 2015, 10:06 AM

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 and France inject another €300 million in the nuclear group.

This should help Areva fund a €12 billion 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 four per cent 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, double-digit operating margin and “significantly” positive free operating cash flow. The French government has direct and indirect stakes amounting to just over 90 per cent of Areva, which was created from a merger in 2001 of state-owned uranium mining and enrichment firm Cogema and nuclear reactor maker Framatome.

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