Shares in EDF hit an all-time low on Wednesday a day after the French utility launched a €4bn capital increase to shore up its creaking finances. The stock fell as much as 10 per cent to €7.78 — 90 per cent below its €86.45 high a decade ago — as the market absorbed heavily-discounted new shares issued as part of the fundraising. EDF needs fresh capital to build the £18bn Hinkley Point nuclear power station it is planning in south-west England and to complete the acquisition of the reactor design and manufacturing arm of Areva, the troubled French nuclear group. The state-controlled utility is trying to meet growing capital requirements while keeping a lid on net debt which amounted to €37.4bn at the end of last year. Under the fundraising launched on Tuesday, EDF offered three new shares for every 10 existing shares at a subscription price of €6.35 per new share — a discount of 34.5 per cent on Monday’s closing price. The French government has committed to cover €3bn of the rights issue, representing three-quarters of the new shares.
FT 8th March 2017 read more »
EDF began a sale of 4 billion euros ($4.2 billion) of shares to bolster its balance sheet and help fund a planned nuclear plant in southwest England. Existing investors can buy three new shares for every 10 they own at 6.35 euros apiece, a third lower than Monday’s price. The French state, which owns about 86 percent of the utility, will subscribe for about 3 billion euros of stock, Paris-based EDF said. EDF has cut costs and jobs, pared investments and set out a plan to divest at least 10 billion euros of assets from 2015 to 2020 to help fund its 12 billion-pound ($15 billion) share of the Hinkley Point plant. It must also this year complete its purchase of at least 51 percent of Areva SA’s reactor unit after last year announcing a binding agreement to take control of the 2.5 billion-euro business.
Bloomberg 7th March 2017 read more »
EDF shares fell to record lows of less than 8 euros yesterday after the French utility launched a bid to raise 4 billion euros in capital to help fund the Hinkley Point nuclear plant. The French state, which owns 85.6 per cent of EDF shares, has committed to contribute 3 billion euros to the fundraising but the company is seeking a further 1 billion euros from equity markets to shore up its finances. EDF is offering its shareholders the chance to buy three new shares for every ten existing shares, at 6.35 a share, a greater-than-expected 34.5 per cent discount to its closing price on Monday before it announced the terms of the capital raise. The French state’s shareholding will reduce slightly, to 84.5 per cent. The state-backed fundraising was crucial to EDF’s decision last year to press ahead with building the £18 billion nuclear plant in Somerset. The company owns two thirds of the project, which is also backed by CGN, of China. The prospect of committing billions to the new reactors, at a time when EDF is also facing lower power prices and a mounting bill for maintaining France’s ageing nuclear reactors, led to the resignation of Thomas Piquemal, its finance chief last year. As well as the capital-raising, EDF is cutting costs and has set out plans to sell 10 billion euros of assets. EDF shares are worth less than a tenth of their peak in 2007, when they traded at more than 86 euros. Peter Atherton, a utilities analyst, said that the overriding issue behind the long-term decline in EDF’s share price had been the worsening outlook for power prices for electricity from France’s nuclear reactors, which account for most of EDF’s business.
Times 9th March 2017 read more »