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Canada to sell stake in nuclear firm

world Updated: May 28, 2009 23:23 IST

Canada said on Thursday it hoped to sell a stake in its nuclear agency to try to grow Atomic Energy of Canada Limited and boost its reactor sales, amid growing interest around the world in nuclear power.

Natural Resources Minister Lisa Raitt told a news conference AECL could not thrive in its current form as it is too small, with a mere 10 percent of installed reactor capacity in the world currently.

As well, it would have to be restructured to make it more attractive to potential investors, she said.

An 18-month review of AECL's operations called for a separation of its research division and its reactor business.

The reactor sales arm could then seek an alliance or partnership, or be divested, it concluded.

"Success in the nuclear industry today requires scale, financial strength and access to growing markets," the government report said. "Compared to its competitors, AECL is undersized and undercapitalized."

"A restructured company in partnership with a strong commercial player(s) would better position the company for success," it said.

National Bank Financial found "significant private sector interest in AECL's commercial operations."

Potential buyers or partners include France's Areva, Russia's state-owned Rosatom, Westinghouse, GE-Hitachi or Mitsubishi Heavy Industries.

In contrast, there is little private sector interest in AECL's Research and Technology division, the review said. But a management partner may be asked to run it for the government.

Raitt said N.M. Rothschild and Sons Ltd. has been hired to develop a restructuring plan, to be submitted by year-end.

There are currently more than 400 nuclear power plants in operation worldwide, producing less than 25 percent of electricity supplies.

The Organization for Economic Cooperation and Development's Nuclear Energy Agency said in an October report that 1,000 new reactors of the size commonly in use today would need to be built by 2050 to meet growing power demands.