Areva to finalise sale to EDF

28 January 2016


On 27 January, Areva's Board of Directors gave a mandate to CEO Philippe Knoche to finalise negotiations with EDF for the sale of a majority of shares in the company. The Board also approved the principle of a €5bn capital increase to restore the group's financial situation.

Areva is in the process of refocusing on the nuclear fuel cycle (mining, conversion, enrichment, treatment and recycling, logistics, dismantling and associated engineering), and is now entering two key stages of the financing plan announced with its 2015 half-year financial results.

The Board welcomed the negotiations with EDF relating to the valuation of Areva NP's activities. EDF's proposal values 100% of Areva NP's capital (excluding Olkiluoto 3 - OL3) at €2.5bn, with a price supplement mechanism pegged to Areva NP's financial performance over the 2017-2018 period, which could amount to €350m. This may be adjusted higher or lower according to the financial statements at the date of completion of the transaction. The impact of structuring plans aimed at protecting EDF from OL3 risks remain to be clarified.

Completion of the transaction, scheduled for 2017, remains subject to consultation with employee representative bodies and to approval from the competent authorities for such a transaction. Areva expects to retain a strategic interest of at least 15%.
The Board noted that the French State, as Areva's leading shareholder, will take part in the €5bn capital increase, which will ensure its success, in compliance with European regulations.

As part of its refocusing, Areva noted that an agreement for the sale of its Canberra subsidiary was signed in December 2015 and that it has announced a plan for the sale of Areva TA.

Areva also noted that it will see a net loss in fiscal year 2015 as a result of provisions, in particular for the restructuring announced in May, supplemental costs for OL3 and renewables contracts, the impact of the Cigéo waste facility project on end-of-lifecycle operations, and an additional write-down of mining assets.

However, cost reduction and cash management efforts is expected to produce a net cash flow from operating activities of approximately €600m, which made it possible to postpone until 4 and 5 January the drawdown of back-up lines of credit of €2bn, initially planned for the third quarter of 2015. The Areva group will provide a complete update on its outlook and on the terms of the recapitalization as part of its 2015 annual results to be published on 25 February.



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