1987 - Year of the shrinking market?
A big borrower in the past, Gaz de France will offer lean pickings to banks and securities houses in 1987. GDF treasurer Jean Reboul said: "Assuming the price of oil remains stable at around $15 to 20 per barrel, and the dollar exchange rate is between Ffr7 and 10, we know that our financing needs in 1987 won't be high.'
In the last two years the company has reduced costs by streamlining its management structure and by negotiating lower prices from its suppliers. More sophisticated debt management, notably the issuance of perpetual debt and the exploitation of swaps, has brought about radical changes in the balance sheet.
The company, though focused on the domestic consumer, is nonetheless international in its finance. "Eighty-five per cent of our natural gas is brought from abroad, all priced in dollars,' said Reboul. Most comes from the Netherlands, Algeria and the USSR. This means that foreign exchange movements, particularly in the relative value of French francs and the dollar, are a perennial concern. Said Reboul: "In 1986 a variation of ten cents meant a fluctuation of Ffr300 million on our accounts.'