Slimmed-Down Areva Will Need Large Capital Increase

France's Areva will need a multi-billion euro capital increase following four years of losses and the sale of a big stake in its nuclear reactor division to utility EDF, most of which will have to come from the state.

CEO Philippe Knoche said the capital increase might have to be more than the 3.4 billion euro ($3.7 billion) financing gap Areva flagged in its 2015-17 finance plan on Thursday.

"The capital increase will also need to contribute to giving the company the financial profile that allows it to finance itself in the medium term," he told reporters at the presentation of Areva's first-half earnings.

Areva set itself a mid-September deadline to come up with the amount it will seek from its shareholders in 2016. France owns 87 percent of Areva and the Kuwait Investment Authority 4.82 percent.

EDF is buying a majority stake in Areva's reactor business in a deal which aims to keep Areva alive to service its existing nuclear reactors and support France's nuclear industry.

Economy Minister Emmanuel Macron wants more detail from Areva before he stumps up any money.

"We need to see precise industrial and financial plans before we commit taxpayers' money," he told Le Monde on Thursday. He also said Areva would keep a 15 to 25 percent stake in the reactor business.

Areva said its 2015-17 financing needs added up to 7 billion euros, made up of negative cash flow of 3.8 billion, 700 million in interest, and debt repayments due of 2.5 billion.

Two billion euros will come from the sale of 75 percent of its reactor construction and services business to state utility EDF as announced on Thursday.

Other asset sales will raise another 400 million, and the business expects to take in cash of 1.2 billion euros over the period. This leaves a financing gap of 3.4 billion euros.

Areva also said it had established the basis of a deal to supply, convert and enrich uranium for EDF and to recycle its spent nuclear fuel until 2030.

EDF, its main customer, would account for more than a third of the new Areva's annual turnover, which would be halved by the divestment from last year's 8.3 billion euros.

The smaller Areva will become a uranium mining and nuclear fuel group, with an order book of 32 billion euros, equivalent to seven years of revenue.

It will compete with Canadian uranium miner Cameco, Kazakhstan's Kazatomprom, Russia's Rosatom and its Uranium One business and European uranium enrichment group Urenco. 

(Reporting by Geert De Clercq)