French nuclear watchdog urges quick resolution of Areva rescue plan

By Michel Rose and Benjamin Mallet

PARIS (Reuters) - Areva's (AREVA.PA) financial situation is worrying, the head of France's ASN nuclear watchdog said on Thursday, urging the loss-making nuclear company and utility EDF (EDF.PA) to wrap up a rescue plan for Areva as soon as possible.

The French government last week approved EDF's plan to take a majority stake in Areva's nuclear reactor business and gave the two state-owned companies a month to do a deal.

"Areva's current financial situation, it could get better, (it) can be considered as preoccupying in terms of safety," ASN Director Pierre-Franck Chevet told Reuters in an interview.

"That's why we have formally asked to hear them ... to ask what kind of organisation they are putting in place to fulfils the commitments they have made in terms of safety for the incoming period," he added, noting a meeting was scheduled by the end of June.

An EDF spokeswoman declined to comment, while an Areva spokeswoman pointed to comments made by Areva Chairman Philippe Varin on Wednesday, that safety remained an absolute priority.

ASN, an independent regulatory authority, last year imposed on Areva a requirement to recondition radioactive waste stored at its La Hague facility in northern France, which could cost several billion euros and which must be provisioned for, Chevet said.

However the watchdog has no power on the merger per se and its only remit is safety. It can shut down a nuclear plant if it sees a safety issue or fine companies for any transgressions.

Chevet said it was important that the period between a decision last week by French President Francois Hollande to approve EDF's takeover plan, and a final implementation of the new organisation, was as short as possible.

"In terms of safety, transition situations, where people are wondering about their future, must be as short as possible," Chevet said at the authority's office just outside Paris.

"We will be extremely vigilant to ensure things go smoothly in terms of safety during this transition period during which many issues will remain unresolved," he said.

A tie-up between Areva and EDF could reinforce their equipment design engineering capacities, which would be a good thing for safety. "The more teams work in harmony, the better it will be," Chevet said.

(Editing by David Holmes)