JNFL, MHI agree terms for buying into NewCo
France's Areva has reached agreements with both Japan Nuclear Fuel Limited (JNFL) and Mitsubishi Heavy Industries (MHI) on the main terms of their respective acquisition of 5% stakes in its nuclear fuel cycle activities. The operations are being split from Areva's reactor business into a new entity, referred to as 'NewCo'.
French utility EDF agreed in July 2015 to take a stake of between 51% and 75% in Areva's reactor unit in a government-backed plan to revitalise France's nuclear power industry. Strategic investors will be able to take minority stakes in the business. The European Commission approved the restructuring of the Areva group in mid-January, ruling that the French government's plan to grant a capital injection of €4.5 billion ($4.8 billion) into Areva does not breech European Union state aid rules.
The reactor operations to be sold have been transferred to a subsidiary 100% owned by Areva NP, referred to as 'New NP'. Areva began the process of splitting off its nuclear fuel cycle activities into NewCo in August 2016, combining the Areva Mines, Areva NC, Areva Projects and Areva Business Support companies and their respective subsidiaries.
Under agreements announced today, both JNFL and MHI will each invest €250 million for a 5% stake in NewCo.
"The negotiations are continuing with these two strategic investors to finalize the documentation," Areva said. "The capital of NewCo remains open to other strategic investors for investment within the same framework as the agreements currently being finalized."
Areva says it has "enjoyed longstanding relations" with JNFL and MHI. The company has provided technical assistance to JNFL for the commissioning of the Rokkasho reprocessing plant and mixed-oxide (MOX) fuel factory.
In 1991, Areva and MHI formed a joint venture in the nuclear fuel cycle business, and in 2006 they concluded an agreement on broader collaboration in the field of nuclear energy. That agreement led to the creation in 2007 of the Atmea 50-50 joint venture, set up to develop, market, license and sell the 1100 MWe Atmea-1 pressurized water reactor combining both companies' technologies.
In November 2015, France and Japan held discussions to pursue their "promising" cooperation in the development of the Atmea-1 reactor design, as well as cooperation in nuclear safety and research on decommissioning nuclear facilities.
MHI said today, "With acquisition of a stake in NewCo, going forward MHI will pursue deeper and expanded exchanges of human resources and technologies with the Areva Group." It added, "By building stronger relationships of cooperation in business and technology areas, MHI will play an important role in reinforcing ties between the Japanese and French governments and between their respective nuclear energy industries as confirmed by the two countries in 2015, thereby strengthening the global value chain in the nuclear power plant business."
Last June, EDF and MHI signed a memorandum of understanding (MOU) for collaboration in civil nuclear power, including MHI taking a stake in Areva NP and joint development of the Atmea reactor design. The MOU also covers a "potential broader range of collaborative ties leveraging the respective technologies and special expertise in the global market."
MHI said today that in addition to investing in NewCo, it has been in discussions "toward making a similar minority stake investment in Areva NP".
Researched and written
by World Nuclear News
