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EDF leaves door ajar to new British Energy sale

21 Sep 2009 00:00:00 | edem

French energy giant EDF has failed to fully quash rumours that it plans to sell a further 20% stake in nuclear generator British Energy (BE). A company spokesman told ICIS Heren on Monday that a sale was not on the agenda “at this stage”.

EDF completed its £12.5bn (€13.9bn) acquisition of BE at the start of this year (see EDEM 6 January 2009). It later sold 20% of the company to UK utility Centrica for the latter’s majority shareholding in Belgian utility SPE (worth £1.2bn) and £1.1bn in cash (see EDEM 11 May 2009).

“Selling more shares in BE could be a way of realising funds in the current cash-strapped environment,” Paul Love, senior market analyst at energy consultancy McKinnon & Clarke told ICIS Heren. “If they want to develop their nuclear programme in the UK, they may need new parties on board or more cash.”

Love identified Sweden’s Vattenfall and the consortium made up of Franco-Belgian utility GDF SUEZ, Spanish generator Iberdrola and the UK’s Scottish and Southern Energy, as possible suitors. The consortium says it remains committed to its UK nuclear new-build programme, despite failing to secure potential sites at the UK Nuclear Decommissioning Authority’s (NDA) land auction (see EDEM 29 April 2009).

But Vattenfall’s potential participation is complicated by its decision to put on hold any entry into the UK nuclear sector until the second half of next year because of the economic downturn (see EDEM 2 June 2009).

EDF’s current debt problems may also be a potential driver for any decision to offload further BE stock. It continues to state publically that it is carrying out a review of options for paying down at least €5bn of its net financial debt (see EDEM 14 August 2009). But most participants expect the company to sell off its UK electricity distribution networks to finance the debt (see EDEM 20 August 2009). RA

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