Power utility giant Eléctricité de France SA on Wednesday announced a deal to takeover the nuclear reactor unit of Areva as part of a rescue package for the struggling engineering company agreed earlier this year.
According to the statement EDF will buyout 75% share in Areva NP, in a transaction worth it at 2.5 billion euros or $2.68 billion. Meanwhile EDF said it plans to sell a 24% stake to other investors in the future.
The transaction omits a series of potential liabilities related to the nuclear reactor developing unit, such as likely losses related to the building of a reactor in Finland and potential losses related to deficient components made at the Le Creusot plant. Those possible liabilities will remain in Areva.
The buyout deal is part of a EUR8 billion plan to salvage Areva after five years of successive losses.
Recently, Areva has failed to match its competitors from Russia, South Korea and the U.S., while demand for new nuclear reactors has plunged following the Fukushima nuclear tragedy in Japan in 2011.
According to the reports, government, which retains around 85% in Areva, will inject EUR5 billion in different sections of the company. Meanwhile Areva will try to raise EUR2.9 billion from the sale of units that make nuclear-submarine engines, wind turbines and nuclear reactors for study’s, after the sale of a majority stake of Areva NP to EDF.
Furthermore the proposed sale is estimated to be operational in the second half of next year and centers on the results of inquiries carried out by the French watchdog on the building of a new reactor in Flamanville and on Areva’s steel mills.