Nuclear company AREVA in a financial mess
It had net debt of €5.2 billion as of June 30, equivalent to 10 times this year’s forecast earnings before interest, taxes, depreciation and amortization, or Ebitda………..there are good industrial reasons why even long-term investors are wary of Areva.
(France) Areva Capital Raise Is Just a Stopgap – WSJ.com,
By MATTHEW CURTIN
14 Dec 10, Selling 15% of Areva to strategic investors was supposed to herald a fresh start for France’s state-owned nuclear-technology champion after years of dithering. Instead, the government has come up with a temporary fix in raising €600 million ($794 million) by selling just 4.8% to Kuwait’s sovereign-wealth fund.
Getting more strategic investors on board next year may be difficult given doubts about Areva’s long-term strategy.Areva, valued at €11 billion, certainly needs a capital boost.
It had net debt of €5.2 billion as of June 30, equivalent to 10 times this year’s forecast earnings before interest, taxes, depreciation and amortization, or Ebitda. Delays and cost overruns have led to €2.6 billion in provisions for the nuclear plant it is building in Finland. Capital spending is running at more than €2 billion a year, twice forecast 2011 and 2012 Ebitda. Buying Siemens out of a joint venture will cost another €2 billion by 2012.
Drumming up investor interest in such a politically sensitive business has proved tough……………..there are good industrial reasons why even long-term investors are wary of Areva. Outside of China, growth in new nuclear capacity is sluggish. Areva’s new-generation reactors are too expensive and too big for many potential customers…..
HEARD ON THE STREET: Areva Capital Raise Is Just a Stopgap – WSJ.com
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