(Adds approval of capital increases)
PARIS, Feb 3 (Reuters) - Two Japanese firms agreed to buy a combined 10 percent stake in the new company being split off from Areva for 500 million euros ($538 million) on Friday, helping a state-backed rescue of the French nuclear group.
Japan Nuclear Fuel Limited (JNFL) and Mitsubishi Heavy Industries (MHI) will take stakes in NewCo and Areva, whose equity has been wiped out by years of losses, said NewCo remains open to other investors.
Areva has held talks about China’s National Nuclear Corporation taking a stake in NewCo, but the two sides could not agree on terms.
Also on Friday, two mainly state-funded capital increases of 2 and 3 billion euros were approved by shareholders of Areva and NewCo, respectively.
Areva said NewCo’s planned 3 billion capital increase will be conducted in two stages. The state will first subscribe to a reserved capital increase of 2.5 billion euros once two pre-conditions set by the European Commission have been met.
These include European Union antitrust authorities’ approval for the planned sale of Areva’s reactor business to fellow state-owned utility EDF, as well as a positive conclusion of nuclear regulator ASN’s safety tests on an Areva-designed reactor under construction for utility EDF in Flamanville, France.
In a second stage, once majority control of Areva’s reactor business has been ceded to EDF, the Japanese firms will subscribe to a second capital increase of 500 million euros.
Areva SA, the legacy parent company that will remain after NewCo is split off and the reactor unit is sold, will receive a two billion euro capital increase from the French state.
Areva SA will remain responsible for the long-delayed reactor project in Olkiluoto, Finland, over which Areva and its Finnish customer TVO are suing each other for billions of euros.
It will also remain liable for any charges related to falsifications discovered in components made by its Creusot Forge foundry unit.
Shareholders granted the Areva board the authority to carry out the capital increase within a period of eighteen months.
The ASN has said it will rule on Flamanville before the summer. Closure of the EDF-Areva deal is expected in the second half of 2017. ($1 = 0.9295 euros) (Reporting by Geert De Clercq; Editing by Jane Merriman and Elaine Hardcastle)