EDF Restructuring Necessary to Remain Competitive, CEO Says
10 Febbraio 2021 - 01:07PM
Dow Jones News
By Dimitri Delmond
Electricite de France SA's reorganization project is vital if
the French energy group is to stay competitive against European
rivals, Chief Executive Jean-Bernard Levy told a French Senate
hearing Wednesday.
The reorganization project, known as Hercules, "is necessary
because our development, our growth and our investments are
seriously hindered by the levels of debt that we have built up for
years now as a result of the Arenh regulation," Mr. Levy told the
Senate's economic affairs commission, referring to France's
nuclear-electricity access regulation.
"For me the Arenh is a poison that has directly contributed, in
the space of 10 years, to making EDF into a player laden with debt,
downgraded five times already by ratings agencies, and which has
ceded more than 10 billion euros ($12.1 billion) in shares and been
recapitalized to the tune of EUR4 billion, of which EUR3 billion
were subscribed by the state," he said.
Mr. Levy said the Arenh mechanism subsidizes EDF's rivals, as it
forces the company to sell its nuclear production below a price
ceiling that doesn't cover costs and which hasn't been re-evaluated
against inflation in 10 years.
The Hercules project has been the source of conflict between the
EDF, the French government and the European Union, with the
company's trade unions fearing a split into three divisions would
lead to job cuts and a dismantling of the company. Negotiations
around the project include a potential reform of the Arenh
mechanism.
This story was translated in whole or in part from a
French-language version initially published by L'Agefi-Dow
Jones.
Write to Dimitri Delmond at ddelmond@agefi.fr
(END) Dow Jones Newswires
February 10, 2021 06:52 ET (11:52 GMT)
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