French state-owned electricity supplier Electricité de France (EdF) announced yesterday that it is planning a share sale of between ?8 billion and ?11 billion ($10.5 billion to $14.5 billion) next year, in what will be the largest share offering ever in France. The French government gave the go ahead for the sale of 30% of EdF's share capital after an independent report on the company's financial needs declared that only an issue of that volume would enable EdF to ?maintain its leading position among Europe's energy suppliers?.
EdF, the largest power company in the world, has debt of around ?24 billion left over from an ambitious expansion programme in the 1990s. It is also burdened with a large pension deficit and ?12 billion in off-balance sheet liabilities. Most of those liabilities derive from put options the company took out on minority stakes in German and Italian companies, which fall due next year. CEO Pierre Gaddoneix said in his announcement yesterday that he would address these derivatives before planning the share offering.
The likely appetite for EdF's offering in the equity markets next year is indicated by the success of Italian energy group Enel's ?7.5