French government to inject more than €2bn in EDF energy group
The French government is to inject about €2.1bn (£1.75bn) into state-controlled energy group EDF to ease the financial pain inflicted by nuclear reactors going offline and the state making the firm supply power below market prices.
The finance minister, Bruno Le Maire, said the capital injection would be made via a rights issue, announced by EDF on Friday, aimed at raising €2.5bn to plug holes in the company’s balance sheet.
EDF said the combined effect of having to sell power at below-market prices and the nuclear outages were likely to knock an estimated €19bn off its forecast core profits in 2022. Its shares fell 2%, extending a slide in which the company’s stock has dropped 19.3% in value since the start of this year.
Le Maire said that by participating in the EDF rights issue, the state was sending a signal to investors. “You can have confidence in EDF,” he said on France’s RTL radio station. Technical problems at the nuclear plants that generate the bulk of EDF’s power will force it to take a large chunk of its capacity offline for checks and maintenance. EDF said the resulting drop in power production is forecast to reduce its 2022 core earnings by an estimated €11bn.
Having to sell electricity at below-market prices was likely to make a further €8bn dent. However, higher global energy prices would add an estimated €6bn to this year’s core profit.
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