EDF has agreed to invest £27bn in new infrastructure over the next five years under the terms of the deal to float the company on the Paris stock market, the Prime Minister, Dominique de Villepin, said. Thierry Breton, the Finance Minister, confirmed the share offer was scheduled to launch on Friday.
The offering will raise about £4.75bn for EDF. The utility's employees will have the opportunity to buy more shares, taking the total value of the operation to about £5.5bn.
The partial privatisation of EDF risks angering trade unions and rekindling the kind of industrial protests that led to a series of strikes last year, halting transport and even cutting off power to ministers' homes.
It could also feed into more recent discontent. Unions staged transport strikes and demonstrations earlier this month to demand wage increases and protest against labour reforms. They also hoped to sound a rallying call to France's fragmented left. The Communist Party, which clashed with the main opposition Socialists over their official backing for the government's failed "yes" campaign in May's EU constitution referendum, called yesterday for, "the ensemble of forces on the left" to oppose the partial privatisation.
Francois Hollande, the leader of the Socialists, vowed that if the left comes back into power in 2007, it would return EDF to 100 per cent state ownership.
Under the terms of the 2004 law that paved the way for EDF's partial privatisation, the government is obliged to maintain at least 70 per cent of its capital.
In a bid to appease union anger, however, the government announced that it will maintain 85 per cent of EDF's capital and pledged to maintain long-term control of the utility.
"We decided to go beyond this guarantee threshold," M de Villepin said. He also pledged that all proceeds from the share issue will be, "strictly and entirely dedicated to the development of the company and its investments". He added: "There's no question of the state taking advantage of this capital increase to raise funds for itself, directly or indirectly."Reuse content