December 14, 2016 / 9:43 PM / 7 months ago

EDF's board approves partial sale of its grid unit RTE

2 Min Read

The logo of France's state-owned electricity company EDF is seen on the company's headquarters in Paris, France, November 24, 2016.Charles Platiau

PARIS (Reuters) - French utility EDF's (EDF.PA) board has approved the partial sale of RTE, the company's high-voltage power grid unit, to state bank Caisse des Depots, the companies said in a statement.

In July, EDF entered exclusive talks with Caisse des Depots and its unit CNP Assurances (CNPP.PA) to sell them a 49.9 percent stake in RTE on the basis of an indicative value of 8.2 billion euros ($9 billion) for 100 percent of RTE's equity .

"The selected scheme provides for Caisse des Depots and CNP Assurances to become core shareholders of RTE alongside EDF, through the creation of a joint venture of EDF (50.1 percent) and Caisse des Dépôts and CNP Assurances (49.9 percent)," the statement said.

The deal is set to close in the first half of 2017, once approval from the relevant merger control authorities has been obtained.

The sale of RTE is part of EDF's plan to sell about 10 billion euros worth of assets by 2020, in an effort to reduce debt and free funds for the utility's 18 billion-pound (21.5 billion euros) project to build two nuclear reactors in Britain.

EDF also plans a 4 billion-euro capital increase early next year, to which the French government - which owns 85.6 percent of EDF - plans to contribute 3 billion euros.

The company said in July it would issue new shares before closing its 2016 financial accounts in February 2017. The timing will depend on market conditions.

A source told Reuters on Tuesday the EDF capital increase was now planned for March. EDF said in a statement on Wednesday that it would be done by the end of the first quarter, subject to market conditions.

In that statement, EDF also confirmed its 2016 EBITDA target of 16.0 billion to 16.3 billion euros and said that for 2017 it was setting an EBITDA target of 13.7 billion to 14.3 billion euros.

EDF will report its 2016 earnings on Feb. 14, 2017.

Reporting by Geert De Clercq, Benjamin Mallet and Ingrid Melander; Editing by Larry King

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