EDF looks to cut debts with €4bn sale of UK electricity distribution business

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.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Financial Adviser

£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Guru Careers: Application Support Analyst / 1st Line Support

£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...

Guru Careers: .NET Developer / Web Developer

£45K - £55K (DOE) + Benefits: Guru Careers: We are seeking a full stack .NET D...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence