By Inti Landauro

PARIS--China National Nuclear Corp. is considering taking a minority stake in beleaguered state-controlled nuclear group Areva SA (AREVA.FR), the French company said Monday in a statement.

CNNC is considering capital injection into Areva after the planned sale of Areva's nuclear reactor manufacturing unit to French state-controlled power utility Electricite de France SA, Areva said.

The possibility of Chinese investors in Areva suggests that France's government is tapping diverse financing sources to rescue an industry that was once a source of national pride. In recent years, Areva has lost ground to competitors from Russia, South Korea and the U.S. as demand for new nuclear reactors has plummeted.

Earlier this year, the French government, which controls about 85% of both Areva and EDF, came up with a plan to rescue the nuclear firm by selling a controlling stake in the nuclear unit, Areva NP--which accounts for about 45% of Areva's revenues--to EDF and then injecting capital to help get it back on its feet.

Areva said it needs as much as 7 billion euros ($7.7 billion) to balance its accounts.

Areva has lost money for the past four years, dogged by a tough market for nuclear reactors since the Fukushima disaster in Japan in 2011. This made it more difficult to recover from a number of poor investment decisions over the past decade and big cost overruns on projects in France and Finland.

The government decided to step in and restructure Areva after the company sank deeper into the red last year when it booked a net loss of EUR4.8 billion on sales of EUR8.3 billion.

Write to Inti Landauro at inti.landauro@wsj.com

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(END) Dow Jones Newswires

November 02, 2015 08:38 ET (13:38 GMT)