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Areva in huge investment cut

October 8, 2014

France's Areva, which specializes in nuclear energy and renewables, has said it would launch another round of painful investment cuts to consolidate its finances. The firm is afraid of being downgraded by S&P.

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Niger Uranabbau Areva Uranmine in Arlit
Image: PIERRE VERDY/AFP/Getty Images

Areva confirmed Wednesday it would scale back originally envisaged investments and increase the sale of non-strategic assets as the French energy group sought to shore up its financial resources.

The 87-percent-state-owned firm announced it would cut planned capital expenditure by 200 million euros ($252 million) over the next two years.

Areva added it would also dispose of 450 million euros' worth of non-strategic assets and minority stakes by the end of 2016. The firm has already sold 1.2 billion euros in assets since 2011 when a large restructuring program began.

Long road towards profitability

"The work on Areva's recovery continues despite the ongoing unfavorable market environment," Chief Executive Luc Oursel said in a statement.

The French company reported a net loss of 694 million euros in the first half of 2014 due to losses on its renewable energy activities and protracted problems in the market for nuclear power equipment.

Areva had feared to be downgraded by ratings agency Standard & Poor's, which was to decide this week whether it would keep the company at "BBB-," just above junk status.

hg/sgb (AFP, Reuters)