EDF CEO Sees No Sign of Quick EU Nod on French State Aid
(Bloomberg) -- Electricite de France SA’s head said there’s no sign of a quick agreement between France and the European Commission on a reorganization of the debt-laden utility that would help shore up its finances.
“These discussions are extremely difficult,” Chief Executive Officer Jean-Bernard Levy said at the company’s annual shareholders meeting Thursday. “There’s no reason to think that discussions can rapidly succeed; there’s also no reason to think that they might not succeed.”
The comments cast doubt on the outcome of the talks aimed at giving the state-controlled utility more regulated revenue from its nuclear power output to help maintain aging atomic plants that are the backbone of France’s electricity supply. The European Commission, which vets individual countries’ aid, wants to ensure that the reform won’t affect competition.
EDF shares fell 2.9% in Paris Thursday, while Stoxx 600 Utilities index rose 0.1%.
Time is running out for the utility and the government to get the European Commission’s approval for the reform ahead of France’s presidential and general elections next year, as the overhaul would need to be approved by parliament.
EDF has long complained that the regulated price of part of its nuclear power sales to rivals is not enough to fund rising costs of reactor maintenance, and investments in renewables. A higher price for its entire atomic output would enable it to better compete in Europe as other utilities expand market-share and major oil companies invest more in clean energy.
The reorganization plan includes nationalizing EDF’s nuclear and hydropower activities, and a stock-market listing of a minority stake for its wind, solar, electricity distribution and retail business. The publicly traded entity would be able to consider a “significant capital increase as soon as it’s listed” and to sell bonds to finance projects, Levy wrote to shareholders Thursday.
French Finance Minister Bruno Le Maire has said he wants the backing of at least some of EDF’s four main unions, which so far oppose the plan saying it equates to a dismantling of the group. Le Maire and Levy have said they want to maintain the group’s integrity, making that a “red line” in talks with the Commission.
The timetable regarding the overhaul proposed by the minister “seems to be loosening a bit, and nothing should be decided in May,” CGT union leader Sebastien Menesplier said in a text message, after a meeting with the minister Wednesday.
In a subsequent message sent Thursday, Menesplier made the assumption that the minister might give himself until the autumn to keep discussing the proposed reorganization.
“I will meet unions for as long as necessary to explain to them the details of that project, to correct and adjust what needs to be adjusted, to reinforce some guarantees,” Le Maire said in a parliamentary hearing Thursday. “We have to take the necessary time to explain and convince.”
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