Former Electricite de France SA Chief Financial Officer Thomas Piquemal said he quit two months ago to highlight the risks of proceeding with the 18 billion-pound ($26 billion) Hinkley Point nuclear power project without additional financing. The timetable pushed by EDF Chairman and Chief Executive Officer Jean-Bernard Levy for an investment decision on the U.K. project meant there wouldn’t have been time to strengthen the utility’s balance sheet, Piquemal told a hearing at the National Assembly in Paris. That would have left the company reliant on its 85 percent shareholder, the French state, providing funding and threatened EDF with the same fate as troubled nuclear-reactor builder Areva SA, he said. Speculation has mounted over the future of Hinkley Point since Piquemal resigned amid concerns the project would put EDF under too much financial strain, while labor unions have called for a three-year delay until similar nuclear plants built by the company start operating in France and China. Piquemal said he unsuccessfully requested a three-year delay in the project in 2015 because a U.K. government loan guarantee to help finance Hinkley Point would only be available after a similar plant is completed in Flamanville, France. Levy and Macron have said EDF would risk losing the Hinkley Point project that’s critical to both the utility and Areva if they asked for such a delay. Areva, 87 percent owned by the French state, posted a fifth year of losses in 2015.
Bloomberg 4th May 2016 read more »
EDF’s former chief financial officer urged to utility to delay a final investment decision on building Britain’s Hinkley Point nuclear plant by at least three years, he told France’s parliament on Wednesday. “In January 2015, I proposed to chief executive Jean-Bernard Levy to negotiate a three-year delay with our client because we reasoned that the weight of the project on EDF’s balance sheet would be significant,” former CFO Thomas Piquemal said at a parliament committee hearing. Piquemal said that hybrid debt – of which EDF has issued about 10 billion euros – is indeed more expensive than normal debt, but a lot cheaper than a capital increase and that if the company had not issued the hybrids it would have had to proceed to a capital increase. But he warned that EDF must do all it can to avoid a major credit rating downgrade by debt agencies. Piquemal said that if EDF’s credit rating is strongly downgraded, the hybrid debt will be downgraded to junk bond status, which would pose the problem of its future refinancing from 2020 onwards. “The company cannot afford a significant credit downgrade,” he said.
Reuters 4th May 2016 read more »
EDF’s former finance chief tried to persuade the French energy giant to postpone plans to build an £18 billion nuclear power station at Hinkley Point, Somerset, for at least three years, he told French MPs yesterday. Speaking publicly for the first time since his resignation in March after a boardroom row over the project, Thomas Piquemal said that he quit in desperation because he feared signing off a decision in which he did not believe and considered a threat to EDF’s financial stability. Areva’s problems deepened further this week after it emerged that the state-owned company was being investigated by ASN, the nuclear safety watchdog in France, because irregularities were found in 50 large components installed in French nuclear reactors. ASN said that the discovery of weak spots in the steel reactor vessel of the Flamanville plant had triggered a review of manufacturing procedures at Areva’s Creusot steel forging plant, which has built equipment for the French nuclear programme for decades. ASN has asked Areva to determine the potential impact on the safety of France’s 58 nuclear reactors that generate nearly 80 per cent of the nation’s electricity. Yesterday, Segolene Royal, the French energy minister, sought to damp public fears that up to 30 French reactors could contain faulty components. “I can tell you . . . that the initial results are good, that is to say the components meet regulations. It is the documents that were badly prepared,” Ms Royal said in an interview on RTL, the French radio station. Experts say the investigation of Areva may affect EDF’s willingness to launch a bailout because of the potential liabilities linked to the discovery of faulty components inside a reactor. A similar investigation in Japan led to the shutdown of 17 nuclear reactors.
Times 5th May 2016 read more »