1. Skip to content
  2. Skip to main menu
  3. Skip to more DW sites
Live TV
Latest audioLatest videos
In focus
Middle EastUS election Ukraine

Areva shares plummet after forecasts suspended

November 19, 2014

French nuclear giant Areva's stock price have tumbled 16 percent, a day after the company said it was suspending its financial outlook for the next two years.

https://p.dw.com/p/1Dq0E
Kernkraftwerk Tricastin ARCHIVBILD 2011
Image: Michel Euler/AFP/Getty Images

Shares in Areva plunged on Wednesday, closing 16 percent lower at 10.13 euros ($12.70) as the company abandoned its financial forecasts for the next two years.

The French nuclear giant suspended trading in its shares on Tuesday following a report in a French business magazine that it was dispensing with its forecasts.

The company's stock had been under pressure for several months and has lost half its value since the beginning of the year. It already fell 20 percent on August 1 when Areva announced a lower earnings forecast for 2014.

The plunge followed an announcement the day before, when the company blamed its troubles on delays in a Finnish nuclear project, the slow restart of Japan's atomic reactors and a lackluster nuclear market.

"Areva is undertaking a review of its strategic outlook and mid-term funding plan, which will be examined in the framework of its governance," the company said in a statement.

At risk of a downgrade

Analysts at French bank Societe Generale said Areva was at a "high risk" of a credit downgrade to BB+.

"It seems clear that Areva will require a cash infusion in the near term," they added.

According to the French business magazine Challenges, the French government, which owns an 87 percent stake in Areva, is considering injecting 2 billion euros ($ 2.5 billion) into the company.

Paris is also mulling the creation of an entity "to park and externalize ultra-losing activities," the magazine said.

Areva announced in October that it would cut investments and step up sales of non-strategic assets in a bid to shore up finances.

The firm also named Chief Operating Officer Philippe Knoche as interim chief executive after the company's chief executive, Luc Oursel, stepped down citing health reasons.

sri/cjc (AFP, Reuters)