Areva deal signals chilled French-Chinese nuclear partnership
Source: Nikkei
China is crucial for growth, but two sides fail to agree on terms
PARIS -- Troubled French reactor builder Areva has agreed to accept equity stakes from Mitsubishi Heavy Industries and Japan Nuclear Fuel. But missing from the list is a Chinese backer, signaling cooling Sino-Franco relations in the nuclear sector.
Reforms, including the injection of fresh capital, are essential for growth of Areva, CEO Philippe Knoche told a shareholders meeting Friday. Shareholders are expected to approve a capital increase of some 5 billion euros ($5.39 billion).
The French government will provide 4.5 billion euros of that. Mitsubishi Heavy and Japan Nuclear Fuel will pick up the rest in exchange for separate 5% stakes in nuclear fuel reprocessing unit NewCo.
After cost overruns while constructing a reactor in Finland, the French group had posted its fifth straight annual net loss through the year ended December 2015. The cumulative losses for the five years reach well north of $8 billion, prompting the company to seek capital relief.
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