Areva to sell assets, may replace CEO - Les Echos
PARIS (Reuters) - French nuclear group Areva will cut its investment budget further and sell assets to shore up its balance sheet while chief executive Luc Oursel's position is under threat, French daily Les Echos said on Monday.
The newspaper said the supervisory board of the state-controlled firm will meet on Tuesday and propose cutting Areva's annual investment budget by another 100 million to 150 million euros from 2015, as well as selling assets worth 500 million to 600 million euros.
The moves are meant to stave off a credit rating downgrade by rating agency Standard & Poor's (S&P), which said last month it was considering lowering Areva's debt rating by one notch to non-investment grade.
The paper also said supervisory board Chairman Pierre Blayau was calling on the government and state nuclear agency CEA -- which together own 87 percent of Areva -- to replace Oursel with Chief Operating Officer Philippe Knoche.
Areva and state holding company APE declined to comment on the report.
Oursel was appointed for five years in June 2011, but the government wants more direct control over the struggling nuclear group. It said in May it would replace Areva's supervisory board by the end of the year with a board of directors and a chief executive officer reporting to the board.
When the governance reshuffle plans were announced, Oursel was widely expected to remain as chief executive officer. But speculation has been growing in French media in recent weeks that Oursel will now be replaced.
Weakened by a 2.4 billion euro 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.
On Aug. 1, Areva 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 percent that day, the biggest fall since Areva was formed in 2001.
On Sept. 9, S&P put Areva on "creditwatch negative" and said it would decide on its rating within 30 days -- which would be Wednesday this week. A source with knowledge of the situation said the 30 days was "not a hard deadline".
Areva's BBB- long-term issuer rating from S&P has been hovering just above junk status since December 2011.
(Reporting by Geert De Clercq and Benjamin Mallet; editing by David Clarke)
