France considering capital increase for Eramet – newsletter (Reuters U.S. – April 4, 2016)

The French government is looking at a comprehensive solution to revive Eramet which could include a capital increase of the ailing mining group, newsletter Lettre de l’Expansion said on Monday.

The company posted a full-year loss of 714 million euros ($812 million) in February, mainly hit by a downturn at its nickel division that has been battered by 12-year price lows linked to global oversupply and slowing Chinese demand.

Discussions took place last week between the French Investment Agency (APE), part of the economy ministry, and the Duval family, the largest shareholder of Eramet, La Lettre de l’Expansion said.

“In the background: the idea of an increase in the overall capital while continuing to support its subsidiary SLN (nickel), a solution dreaded by the Duval shareholder, who would then be diluted,” the newsletter says.

It adds that the matter should be clarified by the end of April when Prime Minister Manuel Valls visits New Caledonia.

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