May 16, 2019 / 9:34 AM / 4 months ago

EDF to protect minority shareholders, seeks reform of nuclear regulation

PARIS (Reuters) - French state-owned utility EDF will protect its minority shareholders in any possible restructuring of its capital and will seek a reform of nuclear energy regulation, CEO Jean-Bernard Levy told shareholders on Thursday.

FILE PHOTO: French state-controlled utility EDF Chief Executive Jean-Bernard Levy attends a news conference during an event entitled Electric Days in Paris, France, October 10, 2018. REUTERS/Benoit Tessier

The French government last year asked Levy to make proposals by the end of 2019 about restructuring EDF, in order to make its nuclear power generation activity more independent of the rest of its business.

“I will personally guarantee the equitable treatment of all shareholders ... their legitimate interests will be taken into account in any financial operations that may be decided,” Levy told shareholders at their annual meeting.

In an interview with Le Figaro newspaper, Levy also said the planned restructuring could lead to the creation of two balance sheets within the same company, one to invest in renewable energy, and the other to invest in nuclear.

Levy reiterated to shareholders that the utility would remain an integrated company, but gave no further details about the possible shape or timing of the restructuring.

He also again insisted heavily on the need to reform power market regulation, notably the ‘ARENH’ mechanism under which EDF has to sell a quarter of its nuclear output to its competitors at a fixed price of 42 euros per megawatthour.

“There is a pressing need to improve the regulation of our nuclear energy ... the asymmetrical regulation of the sale of nuclear electricity at a price that has not moved since 2011 is a major threat to the company,” he said.

He added that the government had understood this and had asked it to help it put in place an “equitable and durable” regulation that protects consumers from power price swings and provides equitable remuneration for its production.

Levy told Le Figaro that the ARENH mechanism had allowed private companies to benefit from the state-funded nuclear energy sector, enabling them to win market share from EDF.

“Private fortunes have been built on the back of EDF’s nuclear fleet,” Levy told Le Figaro.

Reporting by Geert De Clercq; Editing by Sudip Kar-Gupta

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