Loss-making Areva bets on cost cuts, EDF cooperation, China

Wed Mar 4, 2015 8:32am EST
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By Geert De Clercq

PARIS (Reuters) - French nuclear group Areva AREVA.PA will cut spending and improve cooperation with utility EDF and its Chinese partners in an attempt to turn around the loss-making company, but it has postponed a financial restructuring to the end of July.

State-controlled Areva, which posted its fourth consecutive annual loss, said its 2015-2017 financing plan would include "partnerships with an equity component". Chief executive Philippe Knoche did not rule out talks about an equity alliance with EDF. EDF.PA

"Today, talks with EDF focus on operating issues ... talks about a capital stake will come later, if necessary," he said.

French Industry Minister Emmanuel Macron, asked about a possible EDF capital investment in Areva, told Le Figaro newspaper it could be "more industrial cooperation, but could go as far as an alliance, including in terms of capital".

Macron noted in particular Areva's reactors activity, from engineering to maintenance.

EDF shares fell 2.7 percent on the prospect of closer ties to a company caught out by a nuclear industry slump and a series of failed investments. Areva shares were up 0.5 percent.

Areva remains strategically and politically important to its 87 percent owner, the French state. It is key to France's nuclear industry, which generates 75 percent of the country's electricity, the highest level in the world.

"Areva's paradox is that it is a world leader in its sector and a company in crisis," Areva Chairman Philippe Varin, appointed with Knoche in January, told reporters.   Continued...

Philippe Varin, Chairman of French nuclear reactor maker Areva, attends the company's 2014 annual results presentation in Courbevoie near Paris March 4, 2015.  REUTERS/Philippe Wojazer