* Macron and Fillon want to redeploy state corporate assets
* Selling non-strategic stakes could fund new investments
* For Le Pen and Melenchon, nationalisation is an option
* Nuclear sector is off-limits for all candidates
* Graphic of French state holdings: reut.rs/2oR8i0P
By Matthieu Protard
PARIS, April 21 The French presidential election
is set to lead to a shake-up of the state's extensive portfolio
of corporate holdings, whether it is the broad sell-off promised
by frontrunner Emmanuel Macron and Francois Fillon, or the
expanded government role targeted by Marine Le Pen and Jean-Luc
Through the public bank Caisse des Depots and the holding
companies Bpifrance and APE, the state has stakes in some 1,750
French companies with a combined value of nearly 100 billion
euros, of which shares worth 77.4 billion euros were
bourse-listed at the end of 2016.
The four top contenders have sharply different views on the
role of the state in corporate life.
The centrist Emmanuel Macron, whom pollsters tip to narrowly
win the first round on Sunday before a comfortable victory in
the May 7 run-off, and the conservative Francois Fillon both
want to sell non-strategic listed holdings to fund more
forward-looking economic policies.
Macron wants the asset sales to feed a 10 billion euro fund
to boost industry and innovation.
"In certain companies, the state needs to be present,
notably in the nuclear industry, because they are an instrument
of sovereignty," a spokesman for the Macron campaign said.
He said many other state holdings were no longer important
levers of policy but merely the legacy of investments in
industries once deemed innovative or strategic.
"This portfolio must be managed in an active manner and with
a view to renewing our industrial capacity," he said.
The Fillon campaign takes a similar line.
"The proceeds of the asset sales must finance
future-oriented investments such as high-speed internet, fund
strategic stakes that the state wants to hold on to, and help
reduce state debt," a Fillon spokeswoman said.
ENGIE ON THE BLOCK
In January, the public accounts auditor, the Cour des
Comptes, said the state's current approach to public ownership
was ineffectual, and that it could have more influence on
corporate policy through regulatory agencies than through equity
Analysts say the state could reduce its 5.7 percent stake in
the construction company Eiffage, its 28.65 percent
stake in the gas utility Engie, its 50.63 percent
stake in the airport operator ADP or its 23.05 percent
stake in the telecom operator Orange.
In a recent note, analysts at Exane BNP Paribas said a new
government could also sell all or part of the state's 17.58
percent share of Air France-KLM, its 13.1 percent of
STMicroelectronics or the 4 percent it holds of oil
services group TechnipFMC.
France has already sold 7.1 percent of Engie shares since
Analysts say the state's influence on Engie was already
limited, and that similar disposals would have little impact on
the companies' governance or strategy.
Some would, however, require changes to the law. Under
current legislation, the state cannot cut its Engie stake below
33.6 percent for more than two years, and must retain a majority
of capital and voting rights in ADP.
Engie and ADP both declined to comment.
The next president could also be tempted to reduce the
state's 13 percent stake in car maker PSA, whose value
has doubled since a government-led rescue in 2014.
The stake is currently being moved from APE to Bpifrance,
although the latter's head, Nicolas Dufourcq, has said he wants
to keep it at its current level.
Using double-vote provisions in the so-called Florange Law,
the state could sell half of its stake while still keeping the
same influence at board level.
ELECTRICITY THE EXCEPTION
Le Pen and Melenchon, for their part, say they have no
intention of selling state holdings, but would on the contrary
be ready to boost stakes in strategic companies if these came
under threat of a foreign takeover.
Le Pen, widely expected to come first or second in the first
round but to lose to whoever is her challenger in the second,
wants to renationalise France's toll-road companies.
"Any government must reserve the right to buy into certain
strategic companies that come under threat, or banks in case of
serious financial crisis, and should even consider temporary
nationalisations," a campaign spokesman said.
Not even Macron or Fillon is calling for a reduction in the
state's 83.1 percent holding in the power utility EDF - worth
about 18 billion euros and by far the largest in the portfolio -
whose nuclear reactors produce three-quarters of France's
Successive Socialist and conservative governments have used
this control to require EDF to keep power prices artificially
low while at the same time imposing a high dividend pay-out.
Following a visit to EDF's Saint Laurent nuclear plant in
January, Le Pen said she believed the utility must become 100
percent public again, although her electoral programme only
speaks of "keeping state control".
The French government did spend months searching for private
investors to help it recapitalise the 83.2-percent state-owned
nuclear group Areva, whose reactor unit is being sold to EDF as
part of a state-led rescue package for the nuclear industry that
will cost the taxpayer an estimated 10 billion euros.
In the end, two Japanese companies agreed to buy a 10
percent stake in the nuclear fuel unit that has been spun off
from Areva, but no other investors have been found for the
group, whose equity has been wiped out by years of losses.
"Nobody knows the full cost of nuclear ... I have been
industry minister and even I cannot tell you," Macron said this
(Writing and additional reporting by Geert De Clercq; Editing
by Kevin Liffey)