French government offers 10 billion euros to buy back EDF electricity company

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REUTERS - Pascal Rossignol
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The French government on Tuesday announced the launch of a public tender offer to buy out minority shareholders in the national power generator, EDF. The state already owns 84 percent of EDF shares, and is offering nearly 10 billion euos for the remaining 16 percent, currently in private hands.

EDF is deeply in debt. The company's finances have been weighed down by declining output from France's ageing nuclear power stations, and by the government-imposed policy of selling energy at below cost to take price pressure off consumers.

The energy crisis triggered by Russia's war in Ukraine has added to EDF's difficulties and has added urgency to efforts to ensure France' energy security.

President Emmanuel Macron's government hopes to launch the buyout in September, a time horizon which gives the authorities leeway to budget for the cost in a mini-budget in the autumn.

The management of the electricity company have announced the formation of a special committee to advise shareholders on the government offer, which values shares at 12 euros each. The official confirmation of the buyout plans saw EDF shares gain 15 percent, to 11.75 euros, in early trading on the Paris stock exchange.

Macron's 'nuclear renaissance'

The state's complete takeover of EDF, first announced on 6 July, "will give EDF the means to implement the new nuclear power plant programme the president has asked for and the roll out of renewable energy in France", Finance Minister Bruno Le Maire said.

Earlier this year, President Macron called for a "renaissance" of the country's nuclear industry, saying he wanted up to 14 new reactors to power the country's transition away from fossil fuels.

The president also announced that he would seek to extend the lives of all existing French nuclear plants where it was safe to do so.

Analysts say the government does not expect private investors to help raise the enormous sums needed to renovate and re-launch the nuclear industry, making full nationalisation the best choice.

Nuclear energy currently covers some 70 percent of France's electricity needs. The nuclear sector was recently given a sustainable finance label by the European Union.

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