French EdF Needs a Year Before Stake Sale

July 25 2002 – Reforms needed before the French government can sell stakes in state-owned Electricite de France will take about a year, EdF Chief Francois Roussely was quoted as saying in an interview published on Wednesday.

In an interview with L’Express published on the magazine’s Web site before the paper version hit shop shelves, Roussely said negotiations on staff and pensions as well as the legal status of the power utility would precede any stake sale.

“All that will take around a year. It is only at that stage that the problem of the stock market will arise,” he said when asked by the magazine about the risks that current stock market turmoil posed for sales of EdF capital to private investors.

President Jacques Chirac says the state will keep a majority stake but that EdF should be prepared for partial privatisation, or an “opening up of the capital” as it is most often called in a country where the word ‘privatisation’ is often shunned.

There are few estimates so far on the value of EdF. One of the world’s largest electricity companies, one study by a think-tank – the Concorde Foundation, a think-tank reputedly close to Chirac – said the whole of EdF could be worth Euro70bn.

Asked if the sale of EdF capital to private investors could begin at the start of 2004 or take longer to prepare, Roussely replied: “I do not think it will be longer, but it is too early to discuss that.”

The new centre-right government that took power in June has yet to decide how it will proceed, including whether EdF capital should be sold through an issue shares on the stock market or via direct stake sales to other companies, or both.

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