S&P downgrades Areva on Finnish reactor delay

28th June 2010, Comments 0 comments

Standard & Poor's said on Monday it had lowered its rating on French nuclear group Areva by two notches because of delays to the construction of a reactor in Finland.

The agency downgraded Areva to BBB+/A-2 from A/A-1, citing the company's announcement of an additional provision of 400 million euros (493 million dollars) for the Finnish European Pressurised Reactor project.

But it added that its outlook on Areva was "stable," reflecting its view that Areva would likely be able to carry out an disposal program and capital increase, "thus strengthening its balance sheet."

Areva is a world leader in the construction of nuclear power facilities and a major corporate name in France.

The company earlier this month announced a fresh six-month delay to the Finnish project, with the plant not expected to be operational before the end of 2012.

The Olkiluoto reactor was initially to enter service in mid-2009.

Areva in its last note to its Finnish client TVO had put the start-up in mid-2012.

Since then, TVO has been asking for a new timetable in light of numerous delays to the project, notably caused by problems with pipe work.

© 2010 AFP

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