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Exclusive: Nationalization of EDF by France is expected to cost more than 8 billion euros

Exclusive: Nationalization of EDF by France is expected to cost more than 8 billion euros

Exclusive: Nationalization of EDF by France is expected to cost more than 8 billion euros

Nationalization of EDF by France

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  • According to two sources with knowledge of the situation, the French government is prepared to spend more than 8 billion euros ($8.05 billion) to regain full control over the power company EDF (EDF.PA).
  • The agreement is expected to be finalized in the fourth quarter.
  • EDF and the ministry of the economy declined to comment.
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According to two sources with knowledge of the situation, the French government is prepared to spend more than 8 billion euros ($8.05 billion) to regain full control over the power company EDF (EDF.PA). The agreement is expected to be finalized in the fourth quarter.

When taking into consideration outstanding convertible bonds and a premium above current market pricing, one of the sources estimated that the price to acquire the remaining 16 percent of the company that the state does not already own might go as high as over 10 billion euros. EDF and the ministry of the economy declined to comment.

The nationalisation of EDF, which would give the French government, which already owns 84 percent of the company, additional influence over a restructuring of the indebted corporation while dealing with the European energy crisis, was announced last week.

The alternative option, forcing a nationalisation statute through parliament, would take too long, according to the sources, so the state would likely launch a public offer on the market at a premium to the stock price.

Minority shareholders owned a stake in the company valued at roughly 5 billion euros when Prime Minister Elisabeth Borne revealed the nationalisation plan on July 6.

In order to attract minority shareholders, the French government would also need to purchase convertible notes worth 2.4 billion euros and give a premium over current stock market pricing, according to the sources, pushing the total cost of the transaction well over 8 billion euros.

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They did not provide specifics regarding the premium’s magnitude, and one of them claimed that no decision had been made in stone.

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