French nuclear group AREVA on Wednesday announced its five-year restructuring plan that pivots on a creation of new subsidiary, NEW CO, that will focus on cash-flow-generating nuclear fuel cycle businesses.
Highlights of the 2016-2020 road map include creation of a separate entity called NEW CO through partial contribution of AREVA SA assets. There will be a strategic refocus on nuclear fuel cycle businesses that includes a planned withdrawal from plant operations and the sale of some assets.
The restructuring is expected to rely on capital increases for AREVA SA and NEW CO by five billion euros with the consent of the European Commission. In the meantime, “strengthened capital structure … will ensure the completion successful completion of the OL3 project, where delays have been a major drag on revenues and company prestige. Completion of that project would be structured directly or through a subsidiary. NEW CO, simultaneously, is expected to focus on the more profitable nuclear fuel cycle operations.
AREVA said it would meet with investors in Paris on Wednesday to review the 2016-2020 road map and launch discussions with employee representative groups concerning the asset sales and other major strategic changes.
Among the company assets on the selling block are Canberra, which AREVA plans to sell at the beginning of 2017. The restructuring, concurrently, still relies on the sale of AREVA NP's operations to French utility EDF – with 15 percent to 25 percent of the capital of the entity sold transferred by AREVA SA to NEW CO.
The new entity is expected to take advantage of development of the Asian nuclear fleet as well as the need to develop new recycling platforms, interim storage solutions and reactor dismantling strategies.
“In these areas, NEW CO will be able to draw on solid fundamentals … refocused on the fuel cycle,” said AREVA. The company plants to launch NEW CO as an established industry leader that includes “a solid business plan made credible by a backlog of 33 billion euros as of the end of March 2016.”