The European Commission announced Tuesday it had approved a capital financing plan intended to enable troubled French nuclear multinational AREVA to restructure its operations.
The French state, which owns 86.5 percent of AREVA, intends to provide the company with 4.5 euros ($4.8 billion) in capital. AREVA has also received offers from strategic investors to supply another 500 million euros ($529 million), according to a company press release.
AREVA agreed in November to sell its nuclear reactor business to French power utility Eléctricité de France SA for about 2.5 billion euros. With the 5 billion euros in outside capital, AREVA will focus its remaining business on nuclear fuel cycle operations.
The European Commission, the executive body for the 28-nation European Union, found that the French capital supply to AREVA conforms to EU rules for state aid and would strengthen the company “without unduly distorting competition in the Single Market,” according to an EU press release.
AREVA hopes the restructuring will end years of losses that have devastated its equity, Reuters reported Tuesday.
“Today’s decision paves the way for a viable future for AREVA based on a sustainable restructuring plan,” Margrethe Vestager of Denmark, the commissioner in charge of competition policy, said in the EU release. “The plan strikes the right balance between improving the group’s competitiveness and limiting distortions of competition created by the public financing.”
Payment of the French capital to AREVA is subject to two conditions: the European Commission’s approval of the sale of the reactor business to EDF and a “positive conclusion” to French Nuclear Safety Agency testing of the nuclear reactor vessel for the years-overdue Unit 3 of the Flamanville Nuclear Power Plant.
Separately, the U.S. Nuclear Regulatory Commission on Tuesday released information regarding components supplied to 17 nuclear reactors at 13 sites from an AREVA production plant now being investigated by the French Nuclear Safety Agency. The Creusot Forge is suspected of falsifying papers regarding the quality of the components it manufactures, Reuters reported. There are no present safety worries about the parts, the NRC said.
