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9.1 Overview
OPERATING AND FINANCIAL REVIEW
09
9.1.2.
KEY FEATURES OF AREVA’S BUSINESS MODEL
Once the Bioenergy operations are discontinued after the completion of the last
project in progress, the completion of the Olkiluoto 3 EPR project in Finland (“OL3”)
through its subsidiary AREVA NP will be AREVA’s main activity.
9.1.3.
HIGHLIGHTS OF THE PERIOD
The information reported in this section concerns the entire group, including NewCo
and the other operations sold or held for sale.
To restore its competitiveness and reestablish its financial position, the group
designed and has started to implement the Restructuring Plan, consistent with
the 2016-2020 roadmap presented to the market on June 15, 2016.
The Restructuring Plan includes the following three main sections:
p
conversion of the nuclear fuel cycle operations (including the Mining, Front End
and Back End operations) into subsidiaries within the NewCo entity, a wholly
owned subsidiary of AREVA;
p
capital increases of AREVA and NewCo in the total amount of 5 billion euros; and
p
asset sales in order to withdraw from certain operations and refocus on the
nuclear fuel cycle operations.
At the end of the implementation of the Restructuring Plan, and subject to its
execution, AREVA’s main mission will be to complete the Olkiluoto 3 EPR reactor
project (“OL3”) in Finland with the necessary resources, in compliance with
its contractual obligations. Another objective of AREVA will be to close out the
remaining renewable energy projects; it will keep the responsibility associated with
outstanding component contracts and potentially with non-outstanding component
contracts for which serious anomalies might be identified and unresolved by the
completion of the sale of New NP (see below, “Quality action plan concerning the
manufacturing plants of New NP”). Lastly, AREVA will assume responsibility for the
repayment of bank borrowings (bilateral lines of credit and RCF) in 2017 and 2018.
CONVERSION OF THE NUCLEAR FUEL CYCLE OPERATIONS INTO
SUBSIDIARIES WITHIN NEWCO
The creation of subsidiaries involved contributing the nuclear fuel cycle operations
(including the Mining, Front End and Back End operations) to the NewCo entity,
within which strategic investors are authorized to invest alongside the French State.
The bearers of bonds issued by AREVA maturing in 2017, 2019, 2020, 2021,
2022, 2023 and 2024, assembled in general meetings, and the sole holder of the
2018 bond approved the contribution on September 19, 2016 and September 27,
2016 respectively.
On November 3, 2016, AREVA’s shareholders, assembled in an Extraordinary
General Meeting, also approved the contribution, the draft partial asset contribution
agreement between AREVA and NewCo, and the valuation of and payment for
the contribution, and delegated authority to the Board of Directors to effect the
contribution. Furthermore, the contribution and correlative capital increase of
NewCo were approved by the NewCo shareholders on November 3, 2016.
The contribution was effected on November 10, 2016, giving rise to a capital
increase for NewCo in the amount of 45 million euros.
Non-significant assets and liabilities attached to the fuel cycle operations will also
be transferred.
CAPITAL INCREASES OF AREVA AND NEWCO IN THE TOTAL
AMOUNT OF 5 BILLION EUROS
European Commission consent for the Restructuring Plan
On April 29, 2016, the French authorities notified the European Commission of a
restructuring aid measure which they plan to grant to the group pursuant to the
guidelines on “aid for rescuing and restructuring non-financial undertakings in
difficulty”. This notice is based on the Restructuring Plan, which aims to restore
the group’s long-term viability and competitiveness.
The proposed restructuring aid in the maximum total amount of 4.5 billion euros
takes the form of twin capital increases by the injection of public capital in the
amount of 2 billion euros in AREVA and in the maximum amount of 2.5 billion
euros in NewCo.
On July 19, 2016, pursuant to procedural rules on State aid, the European
Commission opened a formal review related to the planned measures, asking in
particular that the French authorities provide clarification on the plan for returning
the group to viability, how it would contribute to its restructuring costs, and how
it would remedy the potential distortions of competition that may result from the
planned recapitalizations, if any. This decision was published in the
Official Journal
of the European Union
on August 19, 2016 in order to allow all interested third
parties (such as, in particular, the group’s competitors, suppliers and customers)
to submit comments they may have in this regard to the European Commission.
On January 10, 2017, at the end of the review of the matter by the European
Commission, the latter authorized the French State’s participation in the capital
increases of AREVA and of NewCo, finding in particular that (i) the planned aid
measures enable the group’s return to long-term viability, (ii) the group is contributing
significantly to the costs of its restructuring and (iii) the compensatory measures
proposed by the group are sufficient and adequate.
2016 AREVA
REFERENCE DOCUMENT
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