SandP warns Areva of likely downgrade
Standard and Poor's warned Wednesday that it would likely downgrade France's state-owned nuclear services group Areva after it raised significantly less fresh capital than expected.
"The rating action reflects the likelihood that we will downgrade by one notch Areva's BBB+ rating as well as its stand-alone credit profile (SACP) of bbb-," Standard & Poor's credit analyst Karl Nietvelt said in a statement.
The rating agency said the 900-million-euro capital increase "is well below the 2.0 billion-2.5 billion we expected" and will leave the company with about four billion in net debt at the end of this year.
"We intend to resolve the CreditWatch in the coming months, once we have gained further insight into Areva's expected additional disposals..," added Nietvelt.
Areva's supervisory board approved over the weekend a 900-million-euro capital hike under which the Kuwait Investment Authority would hold a nearly five percent stake.
Areva chief executive Anne Lauvergeon told French lawmakers on Tuesday that she did not think the company needed a further capital increase.
"It is clear today that we have no liquidity problems," said Lauvergeon.
© 2010 AFP