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France to keep Elf 'golden share'

THE French government is to retain a golden share in Elf Aquitaine when it privatises the oil group, writes Gail Counsell.

The share is likely to give the government powers to prevent anyone taking a controlling or significant stake in the group once it is sold.

The sale of Elf, which could raise up to pounds 6bn for the government, will probably take place shortly after Christmas - it is due to follow Rhone-Poulenc, the chemicals company, which is in the middle of its flotation.

Elf will be the first occasion on which the government will have organised a golden share in a privatised company. It warned when it began its pounds 40bn sell-off that such shares would be used for companies it considered strategically important.

It has signalled that it intends to keep a similar golden share in the Renault-Volvo group, soon to be merged and likely to be floated next year. But its plans have run into difficulty with Volvo's Swedish shareholders.