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RISK FACTORS
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4.2 Risks related to the restructuring plan
4.2.
RISKS RELATED TO THE RESTRUCTURING PLAN
4.2.1.
RISKS RELATED TO IMPLEMENTATION OF THE RESTRUCTURING PLAN
To restore its competitiveness and stabilize its financial position, the group designed
and has begun to implement a Restructuring Plan which includes among other
things the subsidiarization of the nuclear fuel cycle operations (mainly the Mining,
Chemistry, Enrichment and Back End operations) within the entity temporarily called
“NewCo”; AREVA and NewCo capital increases in the total amount of approximately
5 billion euros; and a large-scale asset disposal plan in line with its objective of
refocusing on nuclear materials management. The Restructuring Plan is detailed
in Section 9.1.
Overview.
By means of the income from the planned capital increases and asset sales in
progress in particular, the objective of the Restructuring Plan is to enable AREVA
to meet its requirements for cash and especially to reimburse bond debt and bank
borrowings (bilateral lines of credit, RCF and bridge loan, as applicable), in 2017
and 2018 and to ensure the successful completion of the OL3 project.
Nevertheless, the group cannot give any assurance that this Restructuring Plan will
be sufficient if market conditions were to continue to deteriorate (e.g. drop in the
prices for uranium and for conversion and enrichment services) or if changes in
legislation or regulations were to require some of the group’s companies to revise
significantly upwards the level of funds currently earmarked for end-of-lifecycle
operations. Consequently, the group cannot guarantee that implementation of the
Restructuring Plan will achieve the anticipated results in the expected period of time.
If the group were to be unable to implement the Restructuring Plan effectively, or
if the plan were not to produce the anticipated results, this could have a significant
unfavorable impact on its results, financial position and outlook.
4.2.2.
RISKS RELATED TO THE NON-EXECUTION OR DELAY OF THE AREVA AND NEWCO
CAPITAL INCREASES
As part of the Restructuring Plan, two capital increases are contemplated for AREVA
and NewCo in the total amount of approximately 5 billion euros. The French State
would participate in the reserved capital increase of AREVA in the amount of
approximately 2 billion euros and in the NewCo capital increase, alongside strategic
investors, in the maximum amount of 2.5 billion euros. For additional information
on the terms of the capital increases, see Section 9.1.
Overview.
Although the above-mentioned capital increases were authorized by the two
companies’ respective shareholders at General Meetings held on February 3,
2017, they remain dependent on the fulfillment of the conditions accompanying the
European Commission’s authorization, in conformance with European regulations
on State aid, as described in Section 9.1.
Overview.
The group cannot give any guarantee as to the fulfillment of the conditions
accompanying the European Commission’s decision or as to the date of their
fulfillment.
If the conditions were not to be fulfilledwithin the expected time limit, the execution of
the above-mentioned capital increases and the implementation of the Restructuring
Plan would be compromised, which would have a significant unfavorable impact on
the group’s operations and financial position such that it might not be in a position
to meet its cash requirements.
In particular, in the event of a significant delay in the effective execution of the AREVA
and NewCo capital increases, or in the event that said capital increases are not
carried out, the group could be unable to reimburse shareholder current account
advances from the French State (one for AREVA in the amount of 2 billion euros,
the other for NewCo in the amount of 1.3 billion euros) authorized by the European
Commission in its decision of January 10, 2017.
Furthermore, the structural and/or behavioral measures accompanying the
European Commission’s authorization of January 10, 2017, aimed at limiting
potential distortions of competition resulting from the authorized aid (compensatory
measures), could reduce the benefits expected from the Restructuring Plan and
have a significant unfavorable impact on the group’s operations and financial
position.
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2016 AREVA
REFERENCE DOCUMENT