AREVA is selling its nuclear reactor manufacturing unit as it shifts its focus to nuclear fuel cycle services in forming a new spinoff called New Co., the French company announced Wednesday.
The mass restructuring is expected to raise at least 5 billion euros for the company through government investment and asset sales, according to spokeswoman Katherine Berezowskyj. French utility EDF is expected to control up to 67 percent of New Co, directly and indirectly, while the remaining third would be offered up for private investment. EDF currently owns about 87 percent of AREVA, while private shareholders make up the rest.
The sale of AREVA NP, the company’s nuclear reactor business, to EDF, excludes the company’s 3 billion-euro contract for construction of the Olkiluoto Nuclear Power Plant Unit 3 in Finland. Plagued by construction delays, AREVA estimates the cost overrun of the project at 8.5 billion euros. The sale of AREVA NP is expected to close by the end of 2017 at an estimated value of 2.5 billion euros.
AREVA described in a presentation Wednesday the formation of New Co as the “creation of a new, more profitable, less risky company focused on fuel cycle operations.” The company will primarily focus on mining and the front end and back end of the fuel cycle. AREVA will maintain ownership of the contract at Olkiluoto, as well as hold on to four entities up for sale.
“By means of the solutions it can provide for uranium supply, for its conversion into fuel, and for nuclear fuel recycling, waste management and dismantling, New Co will be in a good position to grow in global nuclear markets,” AREVA CEO Philippe Knoche said in a statement Wednesday. “The strengthened capital structure, the new industrial plants, and the reinforcement of New Co’s technology and innovation base will underpin this strategy.”
Operations being sold to EDF include: AREVA NP, AREVA TA (propulsion and research reactors), Canberra (nuclear measurements), and AREVA’s renewable energy segment. The structuring will involve capital increases of 5 billion euros for AREVA SA and New Co, in which the French state has said it would act as lead shareholder. The Canberra sale is expected in the second half of 2016, while the AREVA TA sale is expected in late 2016 or early 2017.
