July 12, 2017 / 8:22 PM / 10 days ago

Areva says French state completes two billion-euro capital increase

2 Min Read

A logo is seen on the Areva Tower, the headquarters of the French nuclear reactor maker Areva, by architects Roger Saubot et Francois Jullien at La Defense business and financial district in Courbevoie near Paris, France, June 1, 2017.Charles Platiau

PARIS (Reuters) - Areva (AREVA.PA) said on Wednesday the French state had completed its 2 billion-euro (2 billion pounds) capital increase in the company, an important step in the restructuring of the French nuclear group.

The reorganisation of the company, nearly entirely state-owned, involves the sale of Areva's nuclear reactor business as New Areva NP to power utility EDF (EDF.PA) by the end of this year. Its uranium mining, nuclear fuel production and decommissioning activities will be transferred to a new company, NewCo.

Areva and France's finance ministry also said the state would also inject 2.5 billion euros into NewCo by July 31, while Japan's MHI (7011.T) and JNFL would put in capital totalling 500 million euros by the end of the month.

"These capital increases, which represent an extraordinary mobilisation of resources by the state, is a key component and the last phase in the restructuring of the nuclear group, before exclusive control of New Areva NP is handed over to EDF," Finance Minister Bruno Le Maire said in a statement.

The decision in 2015 to reorganise Areva SA came after the company was hit by low demand for nuclear power after the Fukushima disaster in Japan 2011.

Le Maire said the past management of Areva had been "scandalous" but the government was regaining confidence in its leadership.

After the sale of New Areva NP to EDF and the creation of NewCo, Areva SA will be left with managing the EPR OL3 nuclear power plant construction project in Finland, a project which has been beset by a series of delays and extra costs.

($1 = 0.8762 euros)

Reporting by Jean-Michel Belot; writing by Richard Lough; Editing by Greg Mahlich

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