Areva: Euro by euro, Areva is scraping up the billions it needs to fund its investment plans. The nuclear plant maker hasn’t received much help from the French state, which owns, directly or indirectly, some 90 percent of the group. The fiscally-strapped government can’t meet Areva’s needs — some 12 billion euros in the next few years. This didn’t prevent it from scrapping the company’s plans to list five years ago, and meddling in its search for so-called “strategic” investors.
Now Paris has seen the light, with a little help from Kuwait. Investors aren’t exactly rushing. Becoming a minority shareholder in a French state-owned nuclear company, with minimal influence on its strategy, isn’t everyone’s idea of investing bliss — particularly since Areva has been having difficulties developing its next generation of products. Kuwait is willing to take up two thirds of a 900 million euro capital hike in exchange for a 5 percent stake in Areva. The caveat is that it will be listed in the first half of 2011 — or Kuwait will have a put option on the French government.
This is the latest twist of a five-year saga during which French authorities seemed intent on proving the case that the state was indeed a terrible shareholder. Things turned for the worse when Nicolas Sarkozy decided to take the matter into his own hands, cooking up the bizarre idea of pushing for closer partnerships between Areva and EDF , the French electricity giant. The main consequence of Sarkozy’s meddling was to push Germany’s Siemens off its long-standing partnership with Areva — and into a deal with Russia’s Rosatom which now stands as a direct competitor to the French.
Areva has sold assets and shed stakes in some French companies to partly fund its investment needs. It also turned to Qatar; whose demand of a stake in Areva’s uranium mines was deemed unacceptable.
Japan’s Mitsubishi would be willing to invest, save for the fact that EDF is leaning on the government to fend off the Japanese group. Now the government has come full circle and a listing is on the agenda again — although, curiously enough, it hasn’t spelt out what should be the obvious purpose of going to the market: raising funds.
Nevertheless, this could signal the end of Areva’s shareholding travails - provided the government has learned the lessons of its own calamitous meddling.