EDF looks to cut debts with €4bn sale of UK electricity distribution business
Saturday 03 October 2009
The French energy company EDF may sell off part of its UK operation in a move that could raise more than €4bn to help it reduce its debts.
The group said yesterday it was evaluating "ownership options for EDF Energy's electricity distribution business in the United Kingdom". EDF, which is majority owned by the French government, said it "regularly receives spontaneous expressions of interest, but there is nothing formal yet".
Analysts at Citigroup valued EDF Energy at €4.9bn (£4.4bn) and said it should be "easy to sell". The parent company has asked Barclays Capital, Deutsche Bank and BNP Paribas to handle any sale.
Scottish & Southern Energy teamed up with Canadian pension funds to approach EDF Energy earlier this year. Groups including National Grid, the Abu Dhabi Investment Authority and Cheung Kong Infrastructure, owned by the Hong Kong tycoon Li Ka-shing, have also run the slide rule over the business. Insiders believe these companies "and more" will express interest over the coming months.
EDF Energy is the UK's largest electricity supplier, with 100,000 miles of cable covering London, the South-East and East of England. It employs about 5,000 people and provides power to about eight million households.
"It has performed consistently well over a long period," EDF said, adding: "It also has significant future opportunities from grid and distribution network technologies."
Pierre Gadonneix, the chairman and chief executive of EDF, said the proposed sale was "part of the announced asset divestment programme, aiming to reduce our net financial debt by at least €5bn". It wants to cut its debt by next year and is looking at other disposals.
Mr Gadonneix, who is soon to be replaced after falling out with the French government after he called for higher energy bills, insisted that EDF was not pulling out of Britain altogether.
"It is also part of our development strategy in the UK, which is a key market in Europe for the group," he said.
EDF bought the nuclear power generator British Energy for £12bn last year. It said this had "resulted in a better balance between EDF Energy's generation and supply business" – but it also increased its debt from €16.3bn to €24.5bn. The acquisition of BE's nuclear plants means that EDF Energy now meets 25 per cent of the country's electricity needs. It is planning to build four more reactors at sites including Hinkley Point in Somerset and Sizewell in Suffolk.
- 1 Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
- 2 Greece debt crisis explained: A history of just how the country landed itself in such a mess
- 3 People all over the world are getting semicolon tattoos to draw attention to mental health
- 4 Greek debt crisis: Yanis Varoufakis's funniest (and most memorable) quotes
- 5 Swedish minister gives strongest case yet on why EU should stop turning away asylum seekers
Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
Greece debt crisis explained: A history of just how the country landed itself in such a mess
German conservatives are destroying Europe with austerity, says economist Thomas Piketty
Man dies instantly after shooting firework from top of his head
Isis schoolgirl Amira Abase who fled London to join terrorists in Syria mocks victims of Tunisia massacre
More Britons believe that multiculturalism makes the country worse - not better, says poll
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
iJobs Money & Business
£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...
competitive: SThree: Are you passionate about sales?Do you have a keen interes...
£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...