Saturday, May 23, 2015

Engie argument EDF a part of the business of Areva – The World

Le Monde | • Updated | By

In the great game that takes place around the rescue of Areva, weighted with a heavy liabilities and reeling from a loss of 4.8 billion euros in 2014, a player takes center stage: EDF . And its CEO, Jean-Bernard Lévy, stepped over, Friday, May 22, addressing the President and General Director of Areva, Philippe Varin and Philippe Knoche, an “indicative offer” – a little above 2 billion euros, according to Les Echos – to use Areva NP, specialist in the design, manufacture and maintenance of nuclear reactors. This offer on the former Framatome excludes liabilities of the Group, including risks related to the site of the Finnish EPR at Olkiluoto, which could get a state guarantee.

Read also: Areva, dismantling yard

The proposal of the electricity group barely covers a third of 7 billion Areva’s financing needs. And she should be adjusted in the coming weeks, when the seller has opened its books to become a firm offer. Mr. Levy had formally applied for the redemption of Areva NP Tuesday at the general meeting of shareholders, while preventing it would propose a “market price”. The implication a price lower than the value recorded in the accounts of Areva (2.7 billion). This operation, he said, “industrial logic” by strengthening EDF in the trades he has already mastered. It would result in the creation of an independent subsidiary in which enter the industrial and financial partners, French and foreign

Read also:. EDF sets conditions on redemption of Areva reactors

EDF is not alone in the game, even if he holds a large part of the solution. The Prime Minister, Manuel Valls, had mentioned the arrival of other actors. The government has asked several potential partners to address the Areva folder. Chinese electricity groups CNNC and CGN, already partners EDF and Areva in China and the UK are interested in taking a stake in the future subsidiary of EDF. Other candidates are preparing behind the scenes, but with different scenarios in mind.

In particular Engie (formerly GDF Suez). Its CEO, Gerard Mestrallet, will not let the opportunity to strengthen nuclear. He confirmed, Thursday, May 21, his interest in certain activities of Areva. “If we see something, it would be in cooperation with Areva, not just an acquisition of certain assets” , he told the Financial Times on the sidelines of Business and Climate Summit in Paris that brought together many bosses mobilized for the fight against climate change.

Mr. Mestrallet has confirmed the remarks made yesterday by the deputy general manager of Engie. “We think that there is an intelligent collaboration with Areva to international” , indicated with quote Isabelle Kocher “Services” and ” maintenance, “ of operating plants. Areva operates indeed to improve industrial performance and safety of some 250 reactors in the world (out of 440) in France and the United States, Canada, Germany, China, South Korea, Sweden and South Africa.

Teasing

If Mr. Mestrallet and M me Kocher evoke the international activities of Areva, EDF is that they know will never accept qu’Engie accesses the secrets of its 58 reactors operated in France and fifteen slices EDF Energy in the UK. However, it could intervene in the foreign electricians park, a sector that will grow in the coming decades with the aging of facilities and tighter safety standards. Maintenance and services is a recurrent and very lucrative business, where Areva employs about 6,000 engineers, technicians and skilled workers. The activity is difficult, but the financial risks are lower than in the manufacturing and marketing of reactors such as the EPR.

Mr. Mestrallet advance his pawns wisely in a kind of “teasing” well orchestrated. He knows he should not offend the state shareholder of Areva (87%) and EDF (84.5%) while most of the reactors and services business is expected to go under the group’s control electricity. If it ensures not having yet made “no decision” he sought advice of banks and is ready, confident qu’Engie must play a role in the overhaul of the French nuclear industry and strengthen in services. He also said Friday on Bloomberg TV that he had been “discussions in the past” with Areva. Nuclear power plants do not emit CO 2 and have their place in the energy transition, including Engie wants to be the “leader in Europe” .

M. Mestrallet said that his company is “used to the joint venture with Areva” . Both groups have won the tender for the construction and operation of a plant in Turkey and Ankara has chosen Atmea reactor (1000 MW) designed and built by Areva and Mitsubishi Heavy Industries. Engie holds 5% stake in uranium enrichment plant Georges Besse II Areva. Furthermore, he chose windmills nuclear group for both qu’Engie parks operate off Tréport (Seine-Maritime) and Noirmoutier Ile d’Yeu (Vendée).



Arbitration early summer

Engie is a recognized player in the nuclear industry, even if he knows of severe setbacks in Belgium 2 of 7 reactors Electrabel stopped since March 2014 due to cracks in the steel of the vessel where the nuclear reaction occurs and they will not start again until November, generating a loss of € 40 million per month. But the former GDF Suez was never able to operate a plant in France or to participate in the construction of an EPR or Atmea, EDF jealously watching over its monopoly. For Engie the top out remains internationally where it is already present with Tractebel Engineering and Cofely Endel.

Nothing is decided. At the General Meeting Areva on Thursday Mr Knoche said he had discussions “ some formal, some still exploratory” with other companies EDF, and that he was always looking for a “balance between industrial vision, asset disposal opportunities and group finance” . “We must ensure that our assets are properly valued” , he warned.

A Bercy, it is stated that the final choice will be industrial. It is possible both to save Areva, to ensure the modernization of the EDF power plants under the “major overhaul” (55 billion euros invested by 2025) and strengthen on the French sector international markets where competition is becoming increasingly fierce. The government will arbitrate in early summer, before Areva will present its strategic roadmap July 30 with the publication of first-half results in 2015.

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