* Approval must wait for Flamanville safety test, EDF deal
* Flamanville safety clearance expected by end first half
* Approval of reactor unit sale to EDF not before summer
* Commission approves 3.3 billion euros bridging loan
(Adds source on third-party investors, Areva comment, MEP
By Philip Blenkinsop and Geert De Clercq
BRUSSELS/PARIS, Jan 10 European Union antitrust
regulators approved the French government's plan to inject 4.5
billion euros ($4.8 billion) into embattled nuclear group Areva
, saying the rescue would not unduly distort
The European Commission's ruling will allow Areva, whose
equity has been wiped out by years of losses, to restart as a
smaller firm focused on uranium mining and nuclear fuel
production and recycling.
"Today's decision paves the way for a viable future for
Areva based on a sustainable restructuring plan," EU competition
commissioner Margrethe Vestager said in a statement on Tuesday.
The Commission said the aid for 87 percent state-owned Areva
was subject to conditions, notably a positive conclusion of
nuclear regulator ASN's safety tests on an Areva-designed
reactor under construction for utility EDF in
Flamanville, France, as well as EU approval of the planned sale
of Areva's reactor business to EDF.
This means the planned state aid may not be paid until then,
said the Commission, which therefore also approved a 3.3 billion
euro ($3.5 billion) state loan to Areva, aimed at bridging its
liquidity needs until the capital injection can take place.
ASN has said it expects to rule by end June on whether the
Flamanville reactor can start up as planned in 2018. In 2015,
Areva discovered carbon concentrations in the steel of the
reactor vessel, which can weaken the resilience of the steel.
The head of French state holding agency APE said in October
that EU competition authorities were not expected to rule on the
planned takeover of Areva's reactor unit by state-owned EDF
before the summer of 2017.
Following the Commission's statement, Areva said its board
would meet on Wednesday to determine the terms of the capital
increase, on which its shareholders will vote on Feb. 3.
The new nuclear fuel group, provisionally called Areva
NewCo, will get a 3 billion euros capital increase, of which 2.5
billion euros will come from the state. Areva said last month
two investors have made a 500 million euro offer for a combined
10 percent stake in NewCo.
A source familiar with the situation said the two investors
are Japan's Mitsubishi Heavy Industries and JNFL. Talks
are continuing with China's National Nuclear Corporation about
also taking a minority stake in NewCo.
Legacy Areva SA - the firm left over after NewCo splits off
and the reactor unit is sold - will get a 2 billion euro capital
increase and will hold the liabilities related to the troubled
Olkiluoto 3 project in Finland.
Areva and its Finnish customer TVO are claiming billions of
euros from one another in an arbitration suit over the project.
Green Party European Parliament member Claude Turmes said
leaving the Olkiluoto claims in Areva SA amounted to a
nationalisation of losses and questioned the EU's approval.
"The Commission should not let the French state use
taxpayers' money to rescue a failed technology," he said.
($1 = 0.9454 euros)
(Writing by Geert De Clercq; Editing by Sudip Kar-Gupta and