By Inti Landauro 

PARIS--The French government has suggested that Areva SA, the unprofitable state-controlled nuclear engineering group, sell its reactors unit to power utility Electricité de France SA in a shake-up of France's nuclear industry.

Areva Chief Executive Phiippe Knoche informed labor representatives that the company's principal shareholder was studying the partial or total sale of Areva NP, said Jean-Pierre Bachmann, a representative of the CFDT union who attended the meeting. Areva NP manufactures, installs and services nuclear reactors.

Mr. Knoche told that meeting that other options were also under discussion, an Areva spokesman said Friday.

The government proposal is the latest in a long-standing but inconclusive struggle to keep France's nuclear sector afloat after bad investment decisions and changing international attitudes toward nuclear power, notably after the Fukushima disaster in Japan in 2011, have pushed Areva deep in the red.

The meeting between Mr. Knoche and the unions was held after French Economy Minister Emmanuel Macron said he was asking EDF--the operator of France's fleet of nuclear power stations which provide most of the country's electricity--to come to the rescue of Areva by deepening their industrial and possibly financial ties.

A solution will be found for Areva by the end of the month, a spokeswoman for Mr. Macron said Friday.

EDF and Areva, which are both majority-owned by the French state, have to cooperate better over the construction of nuclear reactors and tendering for international business, Mr. Macron said on Thursday.

EDF declined to comment.

Areva is in difficulty after posting a EUR4.8 billion ($5.4 billion) net loss in 2014, the company's fourth consecutive annual loss.

The company faces major hurdles with a contract to build a reactor in Finland, which has cost it billions of euros instead of generating profits, the acquisition of a uranium mine that turned sour, and a slowdown in the nuclear industry after the Fukushima disaster.

Areva is currently working on a plan to sell assets, cut costs, reduce capital expenditure and start talks with unions over possible job cuts.

The unions oppose the sale of the nuclear reactor business, which represented almost 40% of its overall revenues in 2014.

"Areva would be left without its core business, it wouldn't be able to make reactors or even design them," Mr. Bachmann said. "Additionally, the company provides equipment and services to some EDF's competitors, how would that be possible after a sale?"

Unions would oppose the plan and propose an alternative, he said.

Beside designing, making and servicing nuclear reactors, Areva also owns uranium mines, facilities manufacturing nuclear fuel and treating nuclear waste, and makes equipment for renewable energy generation.

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