BRUSSELS: EU anti-trust regulators on Tuesday cleared the French government’s massive restructuring of troubled state-owned nuclear reactor builder Areva.
Problem-prone Areva, which is 87-percent owned by the French state, has faced severe difficulties since 2011, when the Fukushima disaster in Japan called nuclear power generation into question across the world.
In April, Paris notified the EU Commission of a big restructuring plan to save the national champion that included a massive payout from public coffers.
“The European Commission has concluded that French plans to grant a capital injection of 4.5 billion euros ($4.75 billion) to Areva are in line with EU state aid rules,” a statement said.
The Commission added that other regulatory decisions were still needed, including a greenlight by the EU on the buyout of Areva’s reactor business by EDF, the French state-owned electricity supplier.
Areva’s woes were compounded by construction problems affecting its first EPR reactor in Finland — now expected to open nine years late in 2018 — putting company finances deep into the red.
In addition, Areva’s former CEO Anne Lauvergeon has been charged in a case linked to the company’s disastrous 2007 purchase of a Canadian uranium mining firm.
EDF, also majority-owned by the French state, agreed in June 2015 to purchase up to 75 percent of Areva’s reactor unit at a valuation of around 2.7 billion euros, with the deal expected to be finalised in 2017.
France sees nuclear energy as a key national industry and the government has been closely involved in talks to restructure the sector.
The French state, which has already poured in billions to keep Areva afloat and thousands of French workers in their jobs, welcomed the decision.
“This is a major step for the implementation of the main elements of the refounding of the French nuclear industry…” said a statement from the office of French President Francois Hollande.
The cession of the reactor business to EDF will leave Areva with operations that include the extraction of uranium, its enrichment into fuel and then treatment of spent fuel. It will also dismantle oil nuclear reactors.
Areva reached agreement in December with foreign companies — Mitsubishi Heavy Industries and Japan Nuclear Fuel Limited according to a source familiar with the talks — to invest 500 million euros for a 10 percent stake.
The state’s injection of 4.5 billion euros will account for the lion’s share of funds needed to put the company back on its feet.
Trading in Areva shares was halted on Tuesday at 5.20 euros, just a quarter of the peak of over 20.00 euros per share hit in early 2014.