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ENERGY

France reconsiders stake in semi-state giants

France may sell some of its stakes in several large semi-state bodies such as Air France and SNCF, in order to pave the way for future investment, French Prime Minister Jean-Marc Ayrault has announced.

France reconsiders stake in semi-state giants
Is France ready to sell off some of its stakes in semi-state giants like rail network SNCF, Air France, and energy company EDF? Photos: Andy Mitchell/Karen Bryan

French Prime Minister Jean-Marc Ayrault announced in an interview with TF1 television on Sunday that the government was considering reducing its investment in “a certain number of public companies in which the State plays a very significant role”.

The move could see the government cut some of its financial ties with giants such as EDF and Air France.    

Minister of Finance Pierre Moscovici sought to reassure the French public, however. “This is not the return of privatization,” he told French television iTele on Monday.

The proposed move could see a reduction in the government’s control over partially state-owned companies such as EDF, Air France and GDF-Suez – bodies in which it has a significant financial stake.  

During the interview with TF1, Ayrault denied that the proposed move was calculated to “fill in the holes in the budget” but rather to “fund investment” in future schemes, such as the installation of high-speed speed internet throughout the country.    

This is not the first time the government has hinted at “selling the family silver”. In April, France’s Minister for Industrial Renewal Arnaud Montebourg told the Wall Street Journal that the government was considering changing its investments, as part of its “budgetary reorganization” and the “modernization of public politics”.

However, the minister stressed that while France did not rule out this possibility, it had “no intention of losing control over the companies.”  

Currently, the government owns 100 of rail network SNCF, 84 percent of energy supplier EDF, 36 percent of electric utility company GDF-Suez, 15.8 percent of the airline Air France, and 15 percent of carmaker Renault, according to Europe 1 radio.

Other companies that currently benefit from private-public partnerships include France Telecom and industrial conglomerate Areva.  

According to Europe 1, the government could bring in as much as €50 billion from the sale of shares in such companies.

Sunday’s announcement came one month after Montebourg announced that France had sold a 3.12 percent portion of its shares in the aeronautic equipment manufacturer Safran.

The sale brought €448.5 million to the coffers of the state, which still retains 27.08 percent of the company.

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BUSINESS

France’s EDF hails €10billion profit, despite huge UK nuclear charge

French energy giant EDF has unveiled net profit of €10billion and cut its massive debt by increasing nuclear production after problems forced some plants offline.

France's EDF hails €10billion profit, despite huge UK nuclear charge

EDF hailed an “exceptional” year after its loss of €17.9billion in 2022.

Sales slipped 2.6 percent to €139.7billion , but the group managed to slice debt by €10billion euros to €54.4billion.

EDF said however that it had booked a €12.9 billion depreciation linked to difficulties at its Hinkley Point nuclear plant in Britain.

The charge includes €11.2 billion for Hinkley Point assets and €1.7billion at its British subsidiary, EDF Energy, the group explained.

EDF announced last month a fresh delay and additional costs for the giant project hit by repeated cost overruns.

“The year was marked by many events, in particular by the recovery of production and the company’s mobilisation around production recovery,” CEO Luc Remont told reporters.

EDF put its strong showing down to a strong operational performance, notably a significant increase in nuclear generation in France at a time of historically high prices.

That followed a drop in nuclear output in France in 2022. The group had to deal with stress corrosion problems at some reactors while also facing government orders to limit price rises.

The French reactors last year produced around 320.4 TWh, in the upper range of expectations.

Nuclear production had slid back in 2022 to 279 TWh, its lowest level in three decades, because of the corrosion problems and maintenance changes after
the Covid-19 pandemic.

Hinkley Point C is one of a small number of European Pressurised Reactors (EPRs) worldwide, an EDF-led design that has been plagued by cost overruns
running into billions of euros and years of construction delays.

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