France weighs fresh move to nationalise $30b power giant

Bloomberg

The French government is considering whether to revive an ambitious plan to nationalise debt-laden Electricite de France (EDF) SA and reorganise its business with a focus on nuclear production, people with knowledge of the matter said.
The energy market chaos exacerbated by the Russian invasion of Ukraine is giving fresh impetus to France’s long-mooted push to restructure its biggest power supplier. Officials have been having early talks with potential advisers about the idea of buying out EDF’s minority shareholders and delisting the company from the stock market, the people said.
The government, already the biggest investor in EDF with an 84% holding, would like to keep ownership of the company’s domestic business and may review its international operations.
If officials decide to proceed, any plans would only move forward after the French elections, assuming President Emmanuel Macron remains in power, the people said.
EDF could divest stakes in some overseas holdings, including its renewable assets in many geographies, according to the people, who asked not to be identified discussing confidential information. That would raise cash to finance the company’s key nuclear and hydroelectric operations in France. It could also bring in investors to its wind and solar activities to help fund green projects, like it recently did in Italy, the people said.
Deliberations are at a preliminary stage, and there’s no certainty the government will decide to proceed. A spokesperson for the French finance ministry said the information is “false” and the government isn’t working on such a project. A representative for EDF declined to comment.
EDF announced plans in February to raise 2.5 billion euros through a rights issue as soon as possible, and to sell 3 billion euros of assets by 2024 as it seeks to shore up its finances. Credit rating firms downgraded EDF last month and warned of further potential cuts as the group’s net financial debt — which stood at 43 billion euros at end of last year — is set to soar as its earnings plunge in 2022.
The company has signalled it will be squeezed this year, with its French atomic output dropping to the lowest in more than three decades due to repairs and maintenance at its fleet of reactors. The situation has been worsened by the French government’s decision to force EDF to sell more power at a steep discount to protect consumers and businesses from soaring energy prices.
EDF has studied other options to raise cash. Last year, it considered a potential sale of part of its 66.5% stake in the UK’s Hinkley Point C nuclear project, according to the people.