AECL to sell stake of CANDU business

A cloak of silence has been drawn over discussions by Atomic Energy of Canada Ltd (AECL) to sell a stake of its commercial CANDU reactor business to the private sector. Recent media reports say that talks are underway sell a 49%-stake of the CANDU business to General Electric.

Paris-based Areva is also reportedly interested in investing in AECL, as are Westinghouse and Bruce Power. The four firms are much larger than AECL in a highly competitive sector that has been hit with a wave of consolidation in anticipation of a global boom in new reactor construction.

Earlier this year, AECL announced it had entered a four-year agreement with four other firms to bid for the right to build new reactors in Ontario. Those firms are GE Canada, Hitachi Canada Ltd, Babcock & Wilcox Canada and SNC Lavalin Nuclear Inc. A decision by the provincial government is expected within months.

According to media reports, by selling a minority stake in the CANDU business, the federal government would retain control over changes to the crown corporation's governance structure. It would also retain sole ownership of AECL's Chalk River laboratories which conduct CANDU R&D.

AECL is building an Advanced CANDU Reactor, its next-generation reactor which has yet to be certified by the Nuclear Safety Commission. In FY05-06, it had revenues of $407 million including $320 million from its commercial operations. In the same year it had nearly $1.3 billion in orders on its books. Federal support of AECL is about $100 million annually.

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