Electricité de France, 8 billion lawsuit against the state for the ceiling on energy tariffs. But the colossus is about to be nationalized

A few weeks after the announcement of the French government, now close to the complete nationalization of the energy giant Électricité de France (of which it already held an 84% stake), Edf intent a lawsuit against the state, asking for a compensation of 8.3 billion euros. According to the company, this is the amount of losses suffered after the extension of the price cap to which the energy giant must comply to compensate for its monopoly position. In practice, another 20 TWh (terawatt hour) have been assigned to EDF to be sold for 2022 a regulated price (€ 46.2 per megawatt hour), in addition to the previous ones 100 TWh (which sells for 42 euros). Objective: keep your bills low. Already at the beginning of the year, the company had collapsed by more than 20% on the Paris stock exchange after the Minister of Finance, Bruno Le Maire, had stated in an interview that the government wanted to force the company to sell electricity at controlled prices, to ease the pressure from expensive energy on households and businesses.

Now Edf presents the bill for lost profits during the season of skyrocketing energy prices. The last move before full nationalization. The state suing itself. On the other hand, in the meeting, the president and CEO of the company, Jean-Bernard Lévy (at the end of his mandate, ed) had anticipated having submitted a preliminary administrative appeal to the French State to request the withdrawal of the March decree and ordinances.

Edf asks the state for the bill – The tightening began in January, after the announcement of the measure that aimed to limit the increases in bills to 4% as part of a plan that included € 8 billion in tax cuts on electricity consumption. “Following an in-depth legal analysis and in the light of the losses suffered as a result of the decree and the ordinances of 11, 12 and 25 March 2022”, it is explained in a press release, Edf filed a lawsuit before the Conseil d’Etat (the Council of State), in addition to the request for compensation. Despite a significant increase in turnover supported by electricity and gas prices, in fact, in the first six months of 2022, Edf generated a gross operating margin (Ebitda) of 2.67 billion eurosdown 74.8% compared to the same period in 2021, with a net loss of 5.3 billion. The causes are different: the difficulties encountered in nuclear generation in France and, to a lesser extent, in hydroelectricity “in addition to the tariff shields introduced in France in 2022”, commented the same to Jean-Bernard Levy.

Towards nationalization (necessary) All factors that have fueled the hole in Edf’s finances and made it the imminent nationalization needed. The group has a debt that it could overcome the 60 billion euros at the end of 2022, half of the 58 reactors stopped, 12 due to corrosion problems, the others for maintenance operations generally carried out in the summer (when the energy demand is lower). On the other hand, more than thirty reactors have already achieved or will reach by 2030, i forty years of operational activity. In fact, as of this year, France it is no longer a net exporter of energy but he became an importer by adding pressure on the European market. And it is in this situation that another problem has taken place: the abnormal heat that has raised the water temperature of rivers used to cool nuclear reactors (and which could decrease production in power plants).

Therefore, more than ever one is needed long-term strategy to the country which derives from reactors almost 70% of the energy. Paris had announced that it would reduce the share to 50% by 2035, ensuring that no other projects would be launched until the central Flamanville had not been completed. Then the Macron acceleration and the proposal sent to the government by EdF to build at a cost of 50 billion euros, you are Epr2 (improved version of the EPR) which have gone in another direction, also thanks to the geopolitical situation and the need to disengage from supplies of Russian gas. Hence, the necessary nationalization. Also because the expenditure – by 2030 – to extend the life of existing nuclear power plants amounts to at least 50 billion euros.

The proposal is ready to close the games in October – On July 19, Paris confirmed its intention to launch a takeover bid (takeover bid) of 12 euros per share e plans to acquire the other 16% of Edf, paying € 9.7 billion. Suspended from 13 July at the request of the same EDF, the stock market listing resumed after the announcement and the stock immediately jumped and closed at + 14.7% at the opening, above 11.7 euros per share, close to 12 euros. proposed in the state tender offer. Electricity de France arrived on the stock market 17 years agowith a share value of 32 euros, which collapsed to less than 8 euros before the announcement. The proposal will be presented to the Autorite des Marches Financiers by early September, with the aim of closing the process by mid-October. The EDF board has formed an ad hoc committee in response to the government’s offer, which will propose the appointment of an independent expert and issue a recommendation to shareholders, bondholders and staff based on the expert’s work.

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About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

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