France to partially privatise nuclear giant Areva

10th November 2004, Comments 0 comments

PARIS, Nov 10 (AFP) - The French government will further privatise Areva in the first half of 2005, bringing the listed capital of the world's leading civilian nuclear energy group to 35-40 percent, Economy Minister Nicolas Sarkozy said Wednesday.

PARIS, Nov 10 (AFP) - The French government will further privatise Areva in the first half of 2005, bringing the listed capital of the world's leading civilian nuclear energy group to 35-40 percent, Economy Minister Nicolas Sarkozy said Wednesday.

The announcement came as Areva seeks to enlarge its international footprint, notably in energy-hungry China which is planning to add 32 new nuclear reactors over the next 15 years.

The massive Chinese expansion plan is estimated to represent 80 percent of all reactor construction for the next two decades.

The French economy ministry said Wednesday that wider privatisation would better position Areva in the nuclear sector. The group's competitors, apart from Russian rivals, are publicly listed.

"Thanks to this expanded access to capital markets, Areva will be more flexible to exploit opportunities for its development, particularly from an international perspective," the economy ministry said in a statement.

"The state will continue in any case to retain, directly or indirectly, more than half of Areva's capital, due to the strategic nature of nuclear energy for France."

The sale of shares in Areva will be open to retail investors, with a "significant part" being reserved for employees.

The ministry added that funds obtained in the operation will be used to help with dismantling nuclear sites.

Currently 4.5 percent of Areva's capital is quoted in the form of investment certificates. At their current market price, a 40 percent stake would be worth about EUR 4 billion (USD 5.2 billion).

The group has a total market value of about EUR 10 billion based on Tuesday's closing price of EUR 288.80 for the non-voting Areva investment certificates.

Sarkozy, who has signalled presidential ambitions, made the announcement before his planned resignation by month's end. Thus he will not be directly in charge of the privatisation in a sector sensitive to public opinion.

The French nuclear union federation immediately demanded further information on the ministry's decision, recalling "the intangible principles which should be respected" in the process.

The announcement confirmed newspaper reports Wednesday that the government was poised to further privatise the nuclear group.

Areva has annual sales of about EUR 8.26 billion and a workforce of 48,000. It has activities in some 40 countries.

The government directly owns 5.19 percent of its capital. The atomic energy commission CEA holds a 78.96 percent stake, the quasi-public bank Caisse des depots et consignations has 3.59 percent, the state firm Erap has 3.21 percent and state electricity giant EDF has 2.42 percent. Employees hold 1.06 percent.

Since its creation in 2001 in the merger of Cogema, Framatome and CEA Industrie, the group has sought privatisation.

Areva submitted its case to the state holdings agency several months ago, and its chairman Anne Lauvergeon has reiterated that the group was ready for flotation and was simply awaiting the government's decision to go ahead.

Areva already indicated last year that it wanted to list in the spring or autumn of 2004.

But the privatisation was held up by Alstom, the struggling French engineering group. Areva had been mooted several times as a potential buyer of Alstom, which Lauvergeon had steadfastly refused.

With the acquisition of Alstom's power transmission and distribution unit this year, Areva made its case to the government that the time was right for further privatisation.

© AFP

Subject: French News

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