It’s the end of a story, or rather of a parenthesis. That of EDF on the stock market. Prime Minister Elisabeth Borne announced, this Wednesday, July 6, the renationalization of the tricolor electrician. The project had been discussed for several months and had been announced by Emmanuel Macron during the presidential campaign.
But the current crisis in the energy markets and the difficulties of the company push to accelerate the timetable. Politically, this renationalisation is also the subject of a relative political consensus and even among the EDF unions, which should make things easier.
A project at 5 or 6 billion euros
The state currently owns nearly 84% of the company’s capital. The rest is held by French and foreign investors, but also employees. The government will therefore buy back the shares of the minority shareholders. How ? Two options are possible. By a withdrawal from the Parisian dimension or by a law of nationalization. The first hypothesis, easier, would hold the rope.
The operation should not be very expensive. It is valued between 5 and 6 billion euros at the current price of the company, which has also jumped by more than 15% after the announcement of Elisabeth Borne. Put on the stock exchange in November, the action had been introduced at 32 €. In November 2007, it had reached €86.45. It is now worth less than 9 €.
In the end, the renationalization of the company should cost less to the State than the multiple capital increases, which it has already done and will still have to do to keep the electrician afloat.
Very heavy investments to be expected
The government doesn’t have much choice. The obligation made at the beginning of the year to the company to sell more nuclear electricity at cost price to its competitors weighs heavily on the company’s accounts and prevents it from taking advantage of the surge in market prices. The company must however face an investment wall to extend the life of its fleet, valued at around fifty billion euros.
To make matters worse, the company is having a hard time ensuring at the same time the major overhaul projects for its aging nuclear fleet, even though some reactors have to deal with corrosion problems. As a result, 26 reactors are currently shut down out of 56 and many questions arise about the security of supply for next winter.
At the end of December, EDF already had to bear a debt of 43 billion euros and the rating agencies are threatening to downgrade its rating, which would make the cost of refinancing its debt even more expensive. A threat taken very seriously at Bercy. Returned entirely to the state, the company could thus benefit from more advantageous financial conditions.
A key point as the construction of a new program of six nuclear reactors looms, with the key to another fifty billion to be found.
The business plan remains to be defined
But the nationalization of EDF is not an end in itself and the government should not stop there. Because the European Commission, which has never looked favorably on the very dominant situation of the company on the French market, could set its conditions.
This was the subject of the Hercule project, launched in 2019 by the government and abandoned in 2021, because neither the Commission nor the unions wanted it. It provided for the separation of the company into two entities, with nuclear and hydraulics on one side, which would have been public, and on the other, a division bringing together renewables and Enedis, part of which would have been put on the stock exchange. . In one form or another, the project could return.