France said on Friday it would contribute about 2.1 billion euros to the EDF, trying to mitigate the effects of shutting down nuclear reactors and supplying energy at below-market prices, according to Reuters.
Finance Minister Bruno Le Merre said the state capital injection would be made through a pre-emptive rights issue, announced by EDF on Friday, with the aim of raising 2.5 billion euros to close “holes” in the company’s balance sheet.
EDF said the combination of lower energy market sales and nuclear disruptions is likely to cut its projected profits by 20 billion euros in 2022.
EDF shares fell 2% when the Paris Stock Exchange opened, extending a drop in the company’s share, which has lost 19.3% in value since the beginning of this year.
Le Merre said that by participating in the issuance of EDF preference rights, the state is sending a message to investors. “You can trust the EDF,” he told France’s RTL radio station.
A finance ministry official, speaking on condition of anonymity, said the ministry hoped the capital injection would prevent a possible downgrade of EDF’s debt rating to junk.
Source: Capital
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