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UPDATE 1-Areva capital hike talks continue-gov't source

Published 11/29/2010, 04:48 PM
Updated 11/29/2010, 04:52 PM

* Le Figaro says capital hike delayed until spring

* France rejects Qatar conditions - newspaper (Adds background)

PARIS, Nov 29 (Reuters) - Talks are continuing over a planned capital increase at state-owned French nuclear reactor maker Areva , a source close to Economy Minister Christine Lagarde said on Monday, so a deal this year should not be written off.

Le Figaro reported in a preview of its Tuesday edition that there were too many obstacles preventing the transaction from happening by the end of the year as planned and that it would be delayed at least until next spring.

A spokeswoman for Areva declined to comment.

Areva, almost 90 percent owned by the French state, is planning a 15 percent capital hike to raise up to 3 billion euros ($3.94 billion) to finance future development projects. Areva has been talking to the sovereign wealth funds of Qatar and Kuwait and Japan's Mitsubishi Heavy Industries <7011.T>.

A decision needs to come this week for the transaction to be able to take place this year. Supervisory board meetings to consider the issue have been postponed in recent weeks.

Le Figaro said Mitsubishi's involvement met with opposition from French electricity group EDF , which could raise its stake in Areva, and French engineering company Alstom , while French President Nicolas Sarkozy rejected Qatar's demands.

Qatar wants to be able to directly invest in Areva's uranium mining activities, considered of high strategic importance to France, and Qatar and France also remain far apart in terms price, the newspaper said.

Officials at Sarkozy's office declined to comment on the matter earlier on Monday.

Delaying the capital increase until the spring would enable the parties involved to take into account Areva's financial results for 2010, the paper added. ($1=.7606 Euro) (Reporting by Jean-Baptiste Vey, James Regan and Yann Le Guernigou)

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