Areva initiates creation of New Co

31 August 2016

Ahead of the sale of its reactor business to EDF, Areva has begun the process of splitting off its nuclear fuel cycle activities into a new entity, tentatively referred to as 'New Co'.

In late July 2015, EDF and Areva announced they had signed a memorandum of understanding setting out the principal terms and conditions for EDF to take a majority share in Areva's reactor business, Areva NP. The following month, EDF's board agreed on a final valuation of Areva NP's activities at €2.5 billion ($2.8 billion) leading Areva's board to give a mandate to CEO Philippe Knoche to finalize negotiations on the transaction.

Areva said in June that New Co would be created as a wholly-owned subsidiary of Areva SA during the second half of this year, combining the Areva Mines, Areva NC, Areva Projects and Areva Business Support companies and their respective subsidiaries.

The company announced yesterday that it has formally initiated the process for transferring its nuclear fuel cycle activities to New Co.

Areva said it has adopted a draft partial transfer agreement for the transfer of all Areva assets and liabilities related to its nuclear fuel activities as well as all bond holder debt to New Co. The agreement provides for "a remuneration of the contribution calculated on the basis of an actual value of transferred assets and liabilities in the order of €1.4 billion".

The company has called a meeting of bondholders on 19 September to approve the proposed transfer of assets from Areva to New Co and the simultaneous transfer of the bond debt. It has also called an extraordinary general meeting on 3 November to approve the draft partial transfer agreement.

At the beginning of 2017, a total of €5 billion for capital increase would be divided between Areva SA and New Co. Following the transaction - which is subject to approval by the European Commission - the French State will hold, either directly or indirectly, at least two-thirds of New Co's capital, with the remainder held by strategic investors. Areva will therefore become a minority shareholder in New Co.

Areva said that New Co, "enjoying a capital increase of €3 billion and focused on more profitable activities, will be able to deploy its strategy while bearing bond maturities and before seeking to finance its business on the markets in the medium term".

Over the course of 2017, Areva NP's operations will be sold to EDF. During the sale of Areva NP to EDF, 15% to 25% of Areva NP's capital will be transferred from Areva SA to New Co.

Researched and written
by World Nuclear News