Areva T&D biz break-up to be formalised by Sept

Separation of Areva T&D India's transmission and distribution business will be completed between June and September this year, a top company official said here today.

"Currently, there is discussion on separating the entity into a new structure, where the transmission business would go to Alstom Group and transmission to Schneider Electric in line with the global acquisition (of Areva by the two parties)," Areva Country President and Managing Director Rathin Basu said.

The transmission business accounts for 70 per cent of Areva T&D India's revenue and the rest of the business comes from distribution activities.

The issue of separation of the two business is expected to be taken up at the next board meeting of the company in February.

Basu said the final scheme of arrangement and contours of the restructuring plan are expected to be completed between June and September, 2011.

"Finally, the company name Areva T&D will cease to exist after the break-up, as the business(es) would be renamed after the take-over," he said.

Asked whether separation of the company's transmission and distribution businesses would have any impact on existing revenues, Basu said there would be no impact as such, "but now we will have to see how we can add value to each of the businesses of the company under the new parents."

He said Areva T&D India's gross margins have shrunk by up to 15 per cent due to stiff competition posed by overseas players, including Chinese firms.