MHI, JNFL complete acquisition of Orano stakes

27 February 2018

Mitsubishi Heavy Industries (MHI) and Japan Nuclear Fuel Limited (JNFL) have both completed their investment of some EUR250 million (USD307 million) to acquire 5% stakes in Orano, the former Areva nuclear fuel cycle activities.

France's Areva signed agreements in March 2017 with the Japanese companies on the main terms of their respective acquisition of the stakes. Areva began the process of splitting off its nuclear fuel cycle activities into 'New Areva' in August 2016, combining the Areva Mines, Areva NC, Areva Projects and Areva Business Support companies and their respective subsidiaries. New Areva was renamed Orano last month following the completion of the sale of Areva's reactor business to EDF Group (75.5%), MHI (19.5%) and Assystem (5%) at the end of last year. That business - previously known as 'New NP' - was subsequently renamed Framatome.

Orano is focused on nuclear materials development and waste management and its activities encompass uranium mining, conversion and enrichment, used fuel recycling, nuclear logistics, decommissioning and engineering.

Orano's board of directors met yesterday and noted the completion of the capital increase reserved for JNFL and MHI for a total of EUR500 million. Pursuant to the initial agreements signed with JNFL and MHI in March 2017, the funds corresponding to their total investment in Orano had been placed in trust on 26 July, at the same time as the completion of the capital increase reserved for the French state. These funds were released and used for the subscription of JNFL and MHI to Orano's second capital increase.

Orano's capital is now held by the French state (45.2%), the French Alternative Energies and Atomic Energy Commission (4.8%), Areva SA (40%), JNFL (5%) and MHI (5%).

In a statement, Orano said: "This transaction is the last major step in the restructuring of the French nuclear industry, undertaken in 2015, and marks the end of the constitution phase of the Orano group." It added, "With a strengthened financial structure and sound strategic partnerships, Orano now has the means to grow and reach its goal of being a leading player in the production and recycling of nuclear materials, in waste management and dismantling."

MHI said, "With the completion of this investment, MHI will now pursue deeper, more expansive human and technological exchange with Orano."

MHI President and CEO Shunichi Miyanaga said: "For many years Orano has lent its support to the development of nuclear power generation in Japan. Now, with completion of our investment into Orano, our partnership will become even stronger. I have high hopes that we will be able to further improve the safety and reliability of nuclear power generation, thereby contributing to stable global energy supplies and reduced carbon dioxide emissions."

Of its investment in Orano, JNFL said: "We believe that we can further strengthen our cooperative relationship with Orano which has excellent technical capabilities related to reprocessing and mixed-oxide (MOX) fuel processing and know-how cultivated through years of safe and stable operation. We recognise that it will lead to the preparation of our reprocessing plant and MOX fuel factory."

Orano's strategic action plan is centred on three objectives: to generate more than 30% of its revenue in Asia by 2020 (up from the current 20%); to generate positive net cash flow this year; and, to ensure more than half of its staff are in service activities in 2020. Orano said it plans to invest EUR1.8 billion in modernising its plants between now and 2025.

Researched and written
by World Nuclear News