France to buy out minority shareholders of Areva

France would buy out minority shareholders of Areva and delist the troubled nuclear group, the government said yesterday as talks with potential investors in a new nuclear fuel company being spun out of Areva neared a conclusion.

The state, which owned 87 per cent of Areva, said it would offer €4.5 per Areva SA share to minority investors which included Kuwait's investment fund, French utility EDF and French energy group Total.

Areva's shares had fallen by as much as 90 per cent from their 2007 highs as the group incurred repeated losses.

EU antitrust regulators approved the French government's plan to inject €4.5 billion ($4.8 billion) into Areva on Tuesday, saying the bailout would not unduly distort competition.

With the ruling, Areva whose capital had been wiped out by years of losses, would be able to restart as a smaller firm focused on uranium mining and nuclear fuel production and recycling.

Legacy Areva SA - the firm which would be left over following the split and the sale of Areva's reactor unit to state-controlled EDF - would get a €2 billion capital increase and would hold the liabilities related to the troubled Olkiluoto 3 project in Finland, which had been hit by delays.

Areva said negotiations with unspecified investors in the new company were in the process of finalisation and two investors had made a €500 million ($526.40 million) offer for a combined 10 per cent stake in the new entity.

Reuters cited a source familiar with the situation as saying the two investors were Japan's Mitsubishi Heavy Industries and JNFL. Talks were in progress with China's National Nuclear Corporation also taking a minority stake.

"These talks are continuing and focus on governance issues, and on the issue of the balance between the different third-party investor parties," French industry minister Christophe Sirugue told Reuters in an interview.