In what may be the first steps taken towards an initial public offering (IPO) by the giant French utility Electricité de France (EDF), the company has said that it plans to float off London Electricity and EDF International.
Roussely, president of EDF, said that it was considering a partial flotation of London Electricity and EdF International to finance its ambitious international expansion plans in the electricity market. The move would open up EdF’s capital, valued at 90 billion euro, for the first time. “There is no timetable for the sale of these businesses, but it is under consideration.” EDF bought London Electricity a year ago for £1.9 billion. In June, it took over distribution of electricity for SWEB, and in March 2000, it spent $700 million buying the 790 MWe Sutton Bridge power plant from Enron.
EdF denied that it would be privatised by the French government. However, some analysts suggest that if EDF floats its subsidiaries, privatisation would automatically follow. Roussely said that any privatisation of EDF is at least 10 years away.
Meanwhile, a strike at French hydroelectric producer Compagnie Nationale du Rhone (CNR) against liberalisation of the country’s electricity market continues. A CNR spokeswoman said: CNR and EdF have previously enjoyed a very close working relationship. The strikers are protesting the new electricity law, which requires CNR to become an independent electricity producer from EdF. The French Industry Ministry wants to sell CNR. Suez Lyonnaise des Eaux and RWE are considered likely buyers.
Roussely said EDF had agreed a timetable with the French government to accelerate opening of the country’s electricity market by two years. He said EDF agrees with a government proposal to allow consumers of 9 GWh/year to switch supplier from Jan 1, 2001.
EDF has announced that it will strengthen its Nordic presence with acquisitions in Finland, but did not disclose which companies it was in discussion with.
Elsewhere, EDF has denied interest in acquiring any generating companies being sold off by Enel of Italy, nor was it interested in bidding for Spain’s Hidroelectrica del Cantabrico.
The head of France’s electricity regulatory authority said it was essential that the national transmission grid operator was truly independent of EDF. The grid, soon to be opened to partial compeitition, is managed by a unit of EDF separate from the company for accounting purposes, but not legally separate. Regulator Jean Syrota said: “We must ensure that the transmission system operator manages transmission problems as if it were a fully independent company.”
