EDF looks to cut debts with €4bn sale of UK electricity distribution business
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.The French energy company EDF may sell off part of its UK operation in a move that could raise more than €4bn to help it reduce its debts.
The group said yesterday it was evaluating "ownership options for EDF Energy's electricity distribution business in the United Kingdom". EDF, which is majority owned by the French government, said it "regularly receives spontaneous expressions of interest, but there is nothing formal yet".
Analysts at Citigroup valued EDF Energy at €4.9bn (£4.4bn) and said it should be "easy to sell". The parent company has asked Barclays Capital, Deutsche Bank and BNP Paribas to handle any sale.
Scottish & Southern Energy teamed up with Canadian pension funds to approach EDF Energy earlier this year. Groups including National Grid, the Abu Dhabi Investment Authority and Cheung Kong Infrastructure, owned by the Hong Kong tycoon Li Ka-shing, have also run the slide rule over the business. Insiders believe these companies "and more" will express interest over the coming months.
EDF Energy is the UK's largest electricity supplier, with 100,000 miles of cable covering London, the South-East and East of England. It employs about 5,000 people and provides power to about eight million households.
"It has performed consistently well over a long period," EDF said, adding: "It also has significant future opportunities from grid and distribution network technologies."
Pierre Gadonneix, the chairman and chief executive of EDF, said the proposed sale was "part of the announced asset divestment programme, aiming to reduce our net financial debt by at least €5bn". It wants to cut its debt by next year and is looking at other disposals.
Mr Gadonneix, who is soon to be replaced after falling out with the French government after he called for higher energy bills, insisted that EDF was not pulling out of Britain altogether.
"It is also part of our development strategy in the UK, which is a key market in Europe for the group," he said.
EDF bought the nuclear power generator British Energy for £12bn last year. It said this had "resulted in a better balance between EDF Energy's generation and supply business" – but it also increased its debt from €16.3bn to €24.5bn. The acquisition of BE's nuclear plants means that EDF Energy now meets 25 per cent of the country's electricity needs. It is planning to build four more reactors at sites including Hinkley Point in Somerset and Sizewell in Suffolk.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments