The French government plans to fully nationalize EDF, Prime Minister Elisabeth Borne announced on Wednesday, triggering a sharp rise in shares of the indebted energy company.
“I confirm to you today that the State intends to control 100% of the capital of EDF”, said Borne in his speech to the lower house of parliament, when defining the priorities of his government.
EDF, of which the state already owns 84%, faces delays and cost overruns in building new nuclear plants in France and the UK, as well as corrosion problems in some of its aging reactors.
Half of its reactors in France are currently inactive.
EDF has also been hampered by government-imposed rules that force it to sell power to rivals at a discount while prices hit record highs.
The company estimated that production losses will reduce profits by €18.5 billion and discounted energy sales will cost €10.2 billion. Its debt is expected to increase by 40% this year to more than €61 billion.
The option to fully nationalize EDF was signaled by President Emmanuel Macron earlier this year as he aims to make the company the main pillar of a massive investment plan in new nuclear reactors.
Borne did not specify whether the nationalization would be done through special legislation or through the purchase of minority shareholders, nor did he provide a time frame.
Shares in the EDF group, which had fallen 5% before the announcement, began to rise up to 9% soon after.
Source: CNN Brasil
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