by Staff Writers
Paris (AFP) March 17, 2016
The French government stands ready to inject fresh capital into energy giant EDF if necessary, Economy Minister Emmanuel Macron said on Thursday.
"If there is a need to recapitalise, we will do so," Macron said during a visit at the Civaux nuclear station in central France.
"If we need to forego dividends again, we will do so," he added.
EDF, 84-percent owned by the French state, has reportedly asked the government to help it finance a contested plan to build a next-generation power plant in Britain.
French leaders have publically thrown their support behind the £18-billion ($26 billion, 23 billion euros) project at Hinkley Point in southwest England despite growing concern over its price tag that reportedly prompted EDF's finance chief to quit.
Funding that scheme comes on top of EDF's existing debt pile of more than 37 billion euros as it seeks to overhaul its French nuclear plants as well as finance the takeover of the reactor arm of struggling nuclear giant Areva.
Last month, the government accepted dividend payments in shares rather than cash, saving EDF some 1.8 billion euros ($2.0 billion).
"We will all make an effort. The government as shareholder has started doing so," Macron said, acknowledging that the government had been "too short-termist" in its dealings with EDF in recent years.
But a source close to negotiations between EDF and the government told AFP that the utility's chairman, Jean-Bernard Levy, is also pushing the state to accept a capital increase to cover Hinkley Point expenses. "That is the only solution to finance this kind of project," the source said.
Such a cash call would have to be for at least five billion euros, said Alphavalue analyst Juan Camilo Rodriguez, enough to cover EDF's cash flow needs for the next three years.
But that would still leave a question mark over EDF's longer-term future in the face of falling electricity prices and losses in income from France opening up its energy markets to competition, analysts said.
As the French government is strapped for cash, it will lean towards solutions that don't involve handing out money, like converting dividends into stock for several years to come, analysts said.
Another such option would be the partial sale of EDF unit RTE, which manages energy transmission. Analysts at brokers Natixis said recently that the sale of 25 percent in RTE would net EDF around 3.5 billion euros.
Nuclear Power News - Nuclear Science, Nuclear Technology
Powering The World in the 21st Century at Energy-Daily.com
|The content herein, unless otherwise known to be public domain, are Copyright 1995-2016 - Space Media Network. All websites are published in Australia and are solely subject to Australian law and governed by Fair Use principals for news reporting and research purposes. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA news reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement, agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement All images and articles appearing on Space Media Network have been edited or digitally altered in some way. Any requests to remove copyright material will be acted upon in a timely and appropriate manner. Any attempt to extort money from Space Media Network will be ignored and reported to Australian Law Enforcement Agencies as a potential case of financial fraud involving the use of a telephonic carriage device or postal service.|