From a nondescript office block close to London’s Victoria station, EDF, the French utility company, has quietly built one of the world’s largest and most profitable commodity trading businesses. Over nearly two decades EDF Trading has made billions of euros of profit from trading coal, gas and electricity — markets in which it has grown to rival some of the industry’s biggest names including Glencore and Vitol. But now EDF, keen to promote its low-carbon credentials and strengthen its balance sheet, is looking to sell the trading division’s huge coal operation to a joint venture involving Tokyo Electric Power and Chubu Electric Power, two Japanese utilities. Rivals say the move raises questions about whether state-controlled EDF will retain the remainder of its trading business. With net debt of €37.4bn and negative cash flow, EDF is also scrambling to shore up its balance sheet. It has pledged to sell as much as €10bn of assets by 2020, as it prepares to start the expensive and contentious process of building a nuclear power station at Hinkley Point in the UK.
FT 21st July 2016 read more »