Alstom invited to take stake in Areva: report

PARIS (BestGrowthStock) – The French state has invited French engineering group Alstom (ALSO.PA: ) to take part in nuclear reactor maker Areva’s (CEPFi.PA: ) planned capital increase, the Financial Times newspaper reported without citing sources.

Separately, the French government is considering participating in state-owned Areva’s capital increase, French newspapers reported on Thursday citing comments Economic Minister Christine Lagarde made at a news conference.

The FT said the French government and the Kuwait Investment Authority are discussing an initial capital injection of 750 million euros ($981.8 million) for Areva with the French state investing 250 million euros and the Kuwait fund the rest.

Areva declined to comment on the reports. No-one was immediately available to comment at Alstom, whose Chief Executive Patrick Kron in November said the company would not take part in Areva’s planned fund raising.

Any French state participation in Areva’s capital increase is expected to take place through the French Government Shareholding Agency (APE) and would be announced once the first negotiations with investors have finished, a ministry source told Reuters.

The possible participation of the French state in Areva’s plans to raise up to 3 billion euros through a 15 percent capital hike comes as doubts have increased about the government’s ability to seal the deal by the end of this year.

“The state is favorably examining its participation of opening up the capital of Areva,” Lagarde was quoted as saying in La Tribune and Le Figaro at a news conference.

La Tribune said that Areva, nearly 90 percent-owned by the French state, had reacted with caution to Lagarde’s remarks, saying it was not informed about the plans.

The FT, citing people close to the subject, said the fund raising for Areva could happen in two stages.

The state and Kuwait could provide the first tranche this year. A second stage of at least 750 million euros would follow in three to six months involving industrial investors Mitsubishi Heavy Industries (7011.T: ), Alstom and French utility EDF (EDF.PA: ).

French media reports have said talks with Qatar have stalled over Qatar’s demand it take a direct stake in Areva’s mining activities. Alstom and EDF, whose chief Henri Proglio is seen as close to President Nicolas Sarkozy, are thought to oppose an investment by Mitsubishi.

Les Echos newspaper reported on Wednesday that Kuwait could take 5 percent of Areva for 500 million euros while the French FSI strategic investment fund could buy out Areva’s 14 percent stake in STMicroelectronics (STM.PA: ).

(Additional reporting by Jean-Baptiste Vey and Benjamin Mallet)

(Reporting by Caroline Jacobs; Editing by Erica Billingham)

Alstom invited to take stake in Areva: report