Areva restructuring begins

2 September 2016

Areva announced on 30 August that it has formally initiated the process for transferring its nuclear fuel cycle activities to a new entity, to be known as New Co, in preparation for the sale of its reactor business to Electricite de France (EDF). At the end of July, EDF and Areva signed a memorandum of understanding setting out the principal terms and conditions for EDF to take a majority share in Areva's reactor business, Areva NP. In August, EDF's board agreed on a final valuation of Areva NP's activities at €2.5bn ($2.8bn). Areva's board then gave a mandate to CEO Philippe Knoche to finalise negotiations on the transaction.

Areva said in June that New Co would be a wholly-owned subsidiary of Areva SA, combining the Areva Mines, Areva NC, Areva Projects and Areva Business Support companies and their respective subsidiaries. Areva has now adopted a draft partial transfer agreement for the transfer of all Areva assets and liabilities related to its nuclear fuel activities as well as all bond holder debt to New Co. The agreement provides for "a remuneration of the contribution calculated on the basis of an actual value of transferred assets and liabilities in the order of €1.4bn ".

A meeting of bondholders will be held on 19 September to approve the proposed transfer of assets from Areva to New Co and the simultaneous transfer of the bond debt. Areva has also called an extraordinary general meeting on 3 November to approve the draft partial transfer agreement. In early 2017, €5bn for capital increase is to be divided between Areva SA and New Co. The French State will hold, either directly or indirectly, at least two-thirds of New Co's capital, with the remainder held by strategic investors, leaving Areva as a minority shareholder. The transaction is subject to approval by the European Commission.

During 2017, Areva NP's operations will be sold to EDF. With the sale of Areva NP to EDF, 15-25% of Areva NP's capital will be transferred from Areva SA to New Co. Areva said that New Co, "enjoying a capital increase of €3 billion and focused on more profitable activities, will be able to deploy its strategy while bearing bond maturities and before seeking to finance its business on the markets in the medium term".



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