China National Nuclear Corp (CNNC) may buy a minority stake in France’s state-owned Areva SA as part of a broad nuclear cooperation accord signed during French President Francois Hollande’s two-day visit to China.
"The partnership planned between Areva and CNNC involves a possible minority stake acquisition by CNNC," Areva said in a statement.
Nuclear fuel businesses falling within the agreement include uranium mining, recycling, decommissioning and dismantling. Hollande’s office said in a separate statement that a further memorandum may lead to "industrial cooperation" on nuclear waste recycling worth €20bn ($22.1bn), with potentially half for Areva.
"This project offers numerous opportunities for both Areva and CNNC," Areva Chairman Philippe Varin said in the statement. "Strengthening the cooperation with our Chinese partners is an integral factor for Areva’s future success." Areva and EDF are already building two EPR reactor units at China’s Taishan nuclear power plant, and EDF has agreed with another Chinese company, China General Nuclear Power Corp, to develop the Hinkley Point C in the UK.
The memorandum of understanding between Areva and CNNC was signed after state-controlled Areva agreed to sell a majority stake in its nuclear reaction division to Electricite de France (EDF) to help to raise €3.4bn, mostly through a capital increase, to reduce debt. After four consecutive years of losses wiped out Areva’s capital, EDF said in July it had agreed to buy 51-75% of Areva’s reactor arm Areva NP, while Areva would keep a maximum 25% and EDF would look for other investors to invest in Areva NP.
Areva reported in late October that it will book a "significant amount of provisions" in the fourth quarter as it cuts 2700 jobs in France. The company, which plans to refocus on uranium mining and enrichment and nuclear waste recycling, needs to fund $7bn in expenditure and debt repayment by 2017.
Hollande said he would welcome Chinese investment in Areva but added that that the French government was ultimately responsible for the company’s recapitalisation. The French government controls about 85% of both Areva and EDF.
