On 12 December French nuclear energy giant Areva SA, the world’s biggest supplier of nuclear fuel and services, asked that trading in its shares be suspended shortly before the opening of the Paris Stock Exchange, the company said.
Areva SA shares subsequently fell 5 percent before modestly rebounding 1 percent on 13 December. Since the beginning of the year Areva SA shares have lost 47 percent of their value.
Why the reversal of fortune? Areva SA acknowledges a 2011 consolidated operating loss of $1.84-$2.1 billion, but attributes it largely to debts incurred related to its June 2007 acquisition of South African uranium exploration company UraMin, running up $1.9 billion in depreciation.
Seeking to staunch the ocean of red ink, Areva’s Supervisory Board has approved the overall themes of the company’s “Strategic Plan 2016,” which includes “a set of initiatives to reduce operating costs” by 2015 by $1.31 billion by slashing investments by 40 percent, a hiring freeze and the slashing of positions, which Agence France-Presse reported would number between 2,700 and 2,900 jobs, hoping to reduce its new capital investment by a third to $10 billion between 2012 and 2016.
But closer to home, it is increasingly clear that Areva’s eventual fate is ever more bound up with French politics, as with an April 2012 presidential election approaching and legislative elections shortly afterwards, the debate on French nuclear energy policy will move increasingly center stage.
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