French nuclear giant AREVA continued to struggle in 2015, losing $2.2 billion in the year, compared to $5.2 billion in 2014. But the company touted progress on its turnaround plans Friday in its annual report, include the planned sale of radiation monitoring industrial Canberra and reactor and propulsion business AREVA TA.
In addition, the company has initiated discussions with TVO that aims to clear a path for the completion of the Olkiluoto 3 (OL3) reactor in Finland, where arbitration suits are contesting overrun expenses due to extended delays.
The company has been in the red for five consecutive years and maintains that delays at the project in Finland have been a major drag on the company's books. “AREVA and TVO have initiated discussions aiming at ensuring the completion of OL3 project and to settle disputes,” said the company, which is 87 percent stated owned.
The company delayed its report for 24 hours, which triggered negative sentiment in stock markets. The delay was made so that AREVA could include a $1.2 billion bridge loan in its statement. That loan was secured yesterday.
AREVA has some large payments on the docket that will keep investors nervous. A $1 billion bond repayment comes due Sept. 23. The $1.2 billion bridge loan will need to be paid in January 2017 and an $875 million bond will need to be paid in October 2017. An additional $2.2 billion is due in January 2018.
In a statement, Chief Executive Officer Philippe Knoche explained the company's position in a positive light. “The group's competitiveness plan had a very positive impact on costs and cash,” he said. “Half of the ($2.2 billion) loss is due to additional provisions for OL3 and half to provisions for restructuring and impairment related to market conditions.”
The CEO said the company was aiming, with liquidation plans and volunteer retirements, at “creation of New AREVA.”
The most decisive transaction is the sale of AREVA's nuclear reactor business, which is expected to be sold to French utility EDF. However, the companies have disagreed on valuation and on the percent that would be sold. EDF has said it would buy up to 75 percent of the business, while AREVA has offered 85 percent. EDF says the value is $3.1 billion, while AREVA expects a higher price.