French Nuclear Industry Faces Shake-Up Amid Areva Loss

[Oscar]

5 billion euros - French Nuclear Industry Faces Shake-Up Amid Areva Loss

[ http://www.forbes.com/sites/marcelmiche ... reva-loss/ ]

by Marcel Michelson, Forbes Magazine, February 23, 2015

[ http://tinyurl.com/qhr7zym ]

The French have long prided themselves on their nuclear energy expertise that helped the country to claim partial independence in its energy supplies and allowed its industry and rail transport to prosper with relatively cheap power.

On top of that, the nuclear science allowed the country its own atomic weapons that gave it leverage among superpowers when it was outside NATO.

Now, however, the country’s nuclear sector is going through a very difficult phase and may need a recapitalisation and restructuring.

At the heart of the French sector is the nuclear research agency CEA with some four billion euro in annual budget. Then there is Areva [ http://www.forbes.com/companies/areva/ ] that builds nuclear power stations and the recycling of spent fuel, the EDF electricity group [ http://www.forbes.com/companies/edf/ ] and GDF-Suez.

Areva and EDF often work together to obtain foreign contracts, such as in China.

Due to a combination of technical complexities, mismanagement and a political fall-out against nuclear energy following the Fukushima disaster, Areva is now facing a big write-down and a loss for 2014 of some five billion euro. [ http://www.areva.com/EN/news-10466/esti ... -2014.html ]

Their advanced technologies EPR nuclear stations are hitting delays on delays in Finland while other clients are getting cold feet post the Japan tragedy.

Stricter rules on recycling also weigh in the company’s cost base.

French ecology and energy minister Segolene Royal on Monday said she wanted to obtain better synergies through closer cooperation between CEA, Areva and EDF and noted that the situation of Areva was “difficult’.

She told journalists that various options for a solution at the nuclear group, in which the state has an 87 per cent stake, where being studied and further announcements could be made in early March.

Areva, due to publish its results on March 5, brought forward the loss estimate as its chairman Philippe Varin was due to meet with labour unions at the site of the La Hague recycling plant amid expectations of job cuts and wage freezes.

Varin headed carmaker PSA Peugeot Citroen and stepped down when the French state and Chinese carmaker Dongfeng Motor Corp rescued the firm with a capital boost.

EDF recently also changed its leadership and is now headed by Jean-Bernard Levy, a former chairman of defence group Thales and media group Vivendi.

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