Paris confirms stake in nuclear companies’ recapitalization
Nuclear industry – Recapitalization of Areva Group – Press communiqué issued by the Ministry of the Economy and Finance
Paris, 11 January 2017
After the European Commission gave its authorization on 10 January for capital increases to be made in Areva S.A. and NewCo, and pending the fulfilment of the two preconditions set by the European Commission, the state confirms its commitment to take part in the €2-billion reserved capital increase in Areva S.A. and the maximum capital increase of €2.5 billion in NewCo alongside strategic investors, who should provide €500 million.
Negotiations on the entry of these investors into NewCo’s capital are currently being finalized. The general meetings of Areva S.A and NewCo [shareholders] have therefore been convened for 3 February 2017, to authorize these capital increases and delegate their implementation to the respective boards when the preconditions set by the European Commission are met. Once the capital increases have been made, the state will hold direct control of the capital of Areva S.A. and NewCo.
In order to ensure the Areva Group’s liquidity over the coming months, the state also pledges to grant advance payments to the shareholder’s current account totalling €3.3 billion (€2 billion for Areva S.A. and €1.3 billion for NewCo), which will be converted to capital when the aforementioned capital increases are implemented. These advance payments, authorized by the European Commission, will be signed before the 3 February general meetings.
These state commitments, in addition to the product of the asset disposal operations under way, will enable Areva S.A. to face up to its cash flow needs, and in particular to meet its bank repayment deadlines and ensure the successful completion of the OL3 project [nuclear reactor under construction in Finland]; NewCo will have financial resources enabling it to guarantee its development for the benefit of its clients and meet its contractual repayment and, in particular, bond maturity deadlines.
These financial commitments by the state testify to its confidence in the Areva Group’s ability to bring into service the OL3 power station, which uses EPR technology, and in the prospects for growth in those NewCo activities focusing on the nuclear fuel cycle.
Finally, the state intends – as soon as the capital increase in NewCo is implemented, which will lead to Areva S.A. losing control of NewCo, and in accordance with the provisions of Article 236-6 of the AMF [French Financial Markets Authority] General Regulation – to issue a draft public repurchase offer, with a view to a squeeze-out, targeting Areva S.A. shares. Subject to the opinion of the independent expert appointed by the Areva S.A. board regarding this offer, and to the AMF’s approval, the price of this public offer and, if applicable, the squeeze-out will be €4.5 per Areva S.A. share, in line with the price chosen by Areva S.A. for its capital increase.
Michel Sapin, Minister of the Economy and Finance, said: “I want to welcome what is a decisive step in the overhaul of the nuclear industry, decided on by the French President in June 2015. The government is honouring its commitments to recapitalize the company.”
Christophe Sirugue, Minister of State for Industry, said: “another major step has been taken in the government’s road map for restructuring Areva, and more broadly for overhauling the entire industry; I’ll continue to play an active role to the very end.”./.