Reuters/Paris

Standard & Poor’s cut the credit rating of Areva two notches deeper into non-investment grade status after the French nuclear group posted a record 2014 loss.
The rating agency cut Areva’s long-term debt to BB- from BB+ with a developing outlook, which means it could upgrade if Areva bolsters its balance sheet or downgrade further by 2016. S&P downgraded Areva one notch into junk status in November after the firm had issued a profit warning.
On Thursday evening, Areva was also removed from France’s SBF 120 index. Its shares fell 1.1% yesterday.
Areva published a €4.8bn ($5.29bn) loss on Wednesday, and warned its cash flow would deteriorate this year.
S&P said that the full benefits of Areva’s restructuring programme “are set to appear only by 2017 and execution risks exist in our view”.
S&P also said that if Areva’s ties with utility EDF strengthen through equity stakes or joint ventures, or equity increases are very significant, this could lead to a more than one-notch upgrade.
Areva has made bolstering its balance sheet a top priority, but its options are limited as its non-investment grade status makes issuing new debt virtually impossible and the state will not inject new capital before Areva restructures.
According to a study ordered by Areva’s unions, the firm needs a capital injection of 2-2.5bn euros.
On Wednesday, Areva said it plans annual cost savings of €1bn by 2017 and will keep capital expenditure below €3bn over 2015-17, against €4.6bn in 2012-14.
It also plans to sell more than €450mn worth of assets by end 2016.
The CFE-CGC union has said Areva could sell a stake in its Imouraren uranium mining project in Niger to Chinese investors.
Other assets potentially on the block include its US radiation measurement unit Canberra, which union sources say is worth €150mn to €200mn.
Areva’s nuclear transport unit TNI and its nuclear decommissioning unit STMI are also believed to be up for sale.
Asked whether Areva would consider selling its loss-making offshore wind activities, CEO Philippe Knoche said on Wednesday Areva remained committed to the business.
But the offshore wind business has been transferred to a joint venture with Spain’s Gamesa, which would make Areva’s stake in it relatively easy to sell.
“Management wants to get out of renewables,” a union source told Reuters earlier this week.

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