Areva will seek partnerships with Chinese energy companies that could see them take stakes in the French nuclear reactor maker in an upcoming multi-billion euro capital increase, its chairman told the Journal de Dimanche.
“China is central to Areva’s future. Now is the time to make alliances because the country’s nuclear sector is growing and is in need of technology,” said Chairman Philippe Varin.
Areva, which is 85 percent owned by the French state, said on Thursday that it would need a capital increase of at least 3.4 billion euros ($3.74 billion) to help meet funding needs through 2017 and dig out from four years of losses amid a global downturn in the nuclear sector.
After months of negotiations, it also on Thursday agreed to sell a majority stake in its nuclear reactor division to utility EDF for 2.7 billion euros to bring in some much-needed cash.
The French state has signalled it will contribute to the capital increase at Areva, but has misgivings about the amount of money that Varin has demanded, said the JDD, citing anonymous sources.
Courting Chinese nuclear companies would bring in additional capital and mean that the contribution of the French state could be reduced, although it still intends to control at least two-thirds of the company, the paper said.
The leading candidates Areva will approach are Chinese state nuclear firm China National Nuclear Corp (CNNC), which has already said it is open to a deal, and domestic peer China General Nuclear Corporation (CGN), the paper said.
CGN and CNNC have already partnered with French utility EDF on the Hinkley Point nuclear project in Britain.
China is embarking on a nuclear energy boom that could see it build about 100 reactors in the coming decade, making it a key market for Areva. Since the Fukishima nuclear disaster in Japan in 2011, other countries have slowed nuclear projects over safety and cost concerns, hurting Areva’s business.
Varin said it also would make sense to hold discussions with Japan’s Mitsubishi Heavy Industries with whom it already collaborates on developing a new generation reactor. ($1 = 0.9102 euros)