France starts process to fully nationalise power group EDF

(Reuters) – France on Tuesday started the process to fully nationalise debt-laden nuclear power group EDF (EDF.PA), seeking to secure greater control of its energy supplies just as Europe scrambles to replace Russian gas.

The Paris government filed an offer with the market regulator to buy all shares in the group it does not already own for 12 euros apiece, sticking to the price it had already announced over the summer.

It tentatively plans to launch the offer on the market on Nov. 10, the filing said. If all shares and convertible bonds owned by minority investors are tendered, the state will pay 9.6 billion euros ($9.6 billion) to take the company private.

“Climate emergency and the geopolitical situation require strong decisions to ensure France’s independence and energy sovereignty,” a government statement detailing the terms of the offer said.

Placing EDF under full state control would enable it to “commit to long-term projects that are sometimes incompatible with the shorter-term expectations of private investors, without being exposed to the volatility of equity markets.”

President Emmanuel Macron’s government, which already owns 84% of EDF, is also hoping to lower the group’s financing costs through full nationalisation.

EDF is rushing to get its fleet of nuclear power stations ready for the winter after it was forced to shut down more than half of its reactors due to corrosion issues and safety checks.

The group, which has debts of more than 40 billion euros, is also at the centre of an ambitious new reactor construction programme which will require around 50 billion euros in investments.

Goldman Sachs and Societe Generale advised the government on the offer, which is expected to last 20 trading days once it is launched.

The closing of the deal is tentatively pencilled in for Dec. 8, with the government only needing to reach a 90% ownership threshold from the current 84% level to be able to delist EDF from the Paris market.

($1 = 1.0011 euros)

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