The share of the French state energy company EDF was found to fall today by up to 25% after the French government ordered the company to sell more quantities of cheap nuclear energy to smaller competitors, in order to limit the increase of electricity prices in the country, according to his telegram. Reuters.
EDF said the measure could cost up to 8.4 billion euros, while canceling its previous forecasts. [guidance] for 2022.
It was preceded on Thursday night by the downward revision of the estimates for the production of nuclear energy, as technical problems forced the EDF to extend the shutdown of the fifth nuclear reactor.
JP Morgan analysts said the EDF may need to raise capital to offset the blow to earnings. “We believe that the capital increase is really possible at this stage, to offset the fall in EBITDA that it will face in 2022,” said JP Morgan.
Just three months before the presidential election, the government of President Emanuel Macron is facing a lot of pressure due to their rapidly rising inflation.
By limiting energy price increases to 4% this year, the French government is letting EDF investors bear the burden, rather than households.
At the moment, the EDF title is diving 15% to 8.77 euros.
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Source From: Capital
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