Big money moves for Areva

31 March 2011

Areva has made some financial changes to allow investment from Kuwait. It is soon to pay around €1.62 billion ($2.29 billion) to buy out Siemens' 34% stake in their shared reactor business.

 

Shares in Areva were suspended today for the announcement that state nuclear research body and main Areva shareholder the CEA would exchange investment certificates for ordinary shares. Essentially, an investment certificate is equivalent to a share but does not have voting rights.

 

Today's change is part of a financial maneuver also involving a stock-split that will allow a €900 million ($1.2 billion) investment by Kuwaiti interests, two thirds of this from the state Kuwait Investment Authority. When complete, interests in the middle-eastern country are to own 10.2% of Areva.

 

Siemens stake

 

A recent announcement has put a value on the investment Areva will have to make to take full control of reactor business subsidiary Areva NP, created several years ago by the merger of Framatome with the nuclear business of Siemens.

 

In early 2009 Siemens announced it would pull out of the partnership and Areva took full operational control. Under merger terms Areva has the option to buy up Siemens' 34% stake in Areva NP, which has now been independently valued at €1.62 billion ($2.29 billion) based on the firm's status in January 2009.

 

Negotiations can now take place based on that figure, plus or minus 40%. This gives a broad potential price range of €0.97-2.26 billion ($1.37-3.21 billion) which will be settled by an arbitral tribunal in coming months.

 

Siemens said it "expects the sale to make a significant positive contribution to profit in the second quarter of fiscal year 2011." It did warn that the negotiations "could have a material impact on profit."
 
Researched and written
by World Nuclear News
 

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