Areva - Reference Document 2016

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RISK FACTORS

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. 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.

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

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