Nuclear Manufacturer Areva Cuts Investments, Sells Assets to Avert Credit Downgrade
French nuclear reactor manufacturer Areva is cutting investments and selling assets in an attempt to avert a credit rating downgrade from Standard & Poor’s.
“Weakened by a €2.4 billion charge in 2011 on an African uranium mine investment gone awry, as well as billion-euro cost overruns on the building of the Olkiluoto 3 EPR reactor in Finland, Areva had limited financial reserves when the Fukushima disaster put a brake on nuclear investment worldwide,” Reuters reports. Then in August, the company “shocked investors with a 694 million-euro loss and a cut in its 2014-2016 core earnings and cash flow targets. Its stock fell 20% that day, the biggest fall since Areva was formed in 2001.”
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The company’s bond rating from S&P “has been hovering just above junk status since December 2011,” the news service notes.