Areva - Reference Document 2016

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RISK FACTORS

4.2 Risks related to the restructuring plan

4.2.3. RISKS RELATED TO THE NON-EXECUTION OR DELAY OF THE SALE OF AREVA NP’S OPERATIONS

As explained in Section 9.1. Overview , AREVA, AREVA NP and EDF signed a contract on November 15, 2016 setting the terms and conditions for the sale of an interest giving EDF the exclusive control of a new entity, New NP, a wholly owned subsidiary of AREVA NP, which will combine the industrial operations of nuclear reactor and equipment design and supply, fuel assemblies, and services to the installed base of the group, for a selling price of 2.5 billion euros for 100% of the shares of New NP, excluding possible price adjustments and supplements, and without debt assumption at the closing of the transaction. Contracts related to the OL3 project and the resources needed for project completion, along with certain contracts related to forgings at the Creusot plant, will be kept within AREVA NP in the AREVA consolidation scope. The closing of the sale is subject to a certain number of conditions precedent. In particular, closing of the transaction in the second half of 2017 remains subject to: p favorable findings fromASN on the results of tests concerning the primary cooling system of the Flamanville 3 reactor; p completion of and satisfactory findings from quality audits at the Creusot, Saint- Marcel and Jeumont plants;

Moreover, closing of the transaction is conditioned on the transfer of AREVA NP’s operations, excluding the OL3 contract and certain component contracts, to a new entity temporarily called “New NP”. No guarantee can be given as to the fulfillment of the conditions precedent or as to the date of their fulfillment. In particular, the competent authorities could condition the delivery of their authorization on compliance with commitments, injunctions or orders, and certain co-contractors could condition the delivery of their authorization on the negotiation of contractual conditions less favorable to AREVA or New NP. These commitments, injunctions, orders and/or negotiations could affect or delay the closing of the transaction, lead to a decision not to carry out the transaction, or reduce the benefits expected from the transaction, and have a significant unfavorable impact on the group’s operations and on the Restructuring Plan.

p authorization from AREVA NP’s co-contractors; and

p approval from the competent authorities which regulate mergers and nuclear safety.

4.2.4. RISKS RELATED TO THIRD-PARTY AGREEMENTS FOR THE CHANGE OF NEWCO CONTROL

The NewCo capital increase in the total amount of 3 billion euros will lead to the de facto loss of AREVA’s control of NewCo, as the former’s remaining minority interest will be approximately 40% of NewCo’s capital and voting rights at the end of the transaction. The change in the nature of AREVA’s operations and the change of control is subject to the prior authorization of certain third parties, in particular banking partners for the RCF syndicated line of credit and bilateral lines of credit, contractors, suppliers, customers and/or authorities, as regards different agreements signed by AREVA or its subsidiaries or as regards applicable regulations in the countries in which AREVA or its subsidiaries conduct their operations. Even though the change of NewCo’s control has already been approved by several of AREVA’s counterparties, AREVA might not succeed in securing the consent of certain third parties prior to the execution of the NewCo capital increase, or it could be led to renegotiate conditions that could be less favorable than those granted previously in connection with the securing of such consent, which could then reduce the benefits expected from the Restructuring Plan and have a significant unfavorable impact on the group’s operations and financial position.

In early February 2017, AREVA SA secured and accepted a commitment from its banking partners for “senior secured” interim financing of 300 million euros, expected to be signed in the near future and with a maturity date of January 8, 2018. Draws on this financing will be conditioned on the French State’s subscription to the AREVA SA and New AREVA Holding capital increases. In addition to the standard default and early redemption clauses in the event of predefined events, a default clause is provided in the event that certain contractual risks associated with AREVA SA’s operations were to materialize above a certain threshold. Furthermore, AREVA SA secured the necessary consent from the lenders of the syndicated credit of 1.250 billion euros maturing on January 16, 2018 to proceed with the NewCo capital increase and authorize de facto the loss of control. In return for this consent, the lenders of that facility receive better terms, including an additional security and early redemption clauses, in particular as regards the income from the sale of AREVA NP.

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2016 AREVA REFERENCE DOCUMENT