The French Government offers 9,700 million to renationalize EDF 100%

The Government of France has announced the launch of a purchase offer for 15.90% of Électricité de France (EDF) that it does not control at a price of 12 euros per share, which would increase the amount of the transaction to renationalize the company up to 9,700 million euros, as confirmed by the French Ministry of Economy and Finance.

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The shares of EDF, which were suspended from trading on the Paris Stock Exchange on July 13, have returned to trading this Tuesday and received with a rise of 15.26%, to 11.78 euros, the announcement of the conditions of the government offer.

The Ministry has explained that the State intends to acquire 15.9% of the capital of EDF, as well as 60% of the convertible and/or exchangeable bonds for new or existing shares (Oceane) that it does not own, through a public takeover bid simplified document that would be submitted to the Financial Markets Authority (AMF) at the beginning of next September.

According to the proposal presented, the current minority shareholders of EDF would receive a payment of 12 euros for each share of the electricity company in their possession, which represents a premium of 53% with respect to the price registered on July 5, the day on which the French Prime Minister, Élisabeth Borne, confirmed the Government's intention to renationalize the company.

Likewise, the State has announced that it will pay 15.64 euros for each bond convertible and/or exchangeable for new or existing shares (Oceane) that it does not own.

Once the offer is completed, if any, it would be followed by a forced sale if its implementation conditions are met, the ministry has reported.

“This operation reinforces France's energy independence. It gives EDF the necessary means to accelerate the implementation of the new nuclear program desired by the President of the Republic and the deployment of renewable energies in France”, said the French Minister of Economy, Finance and Industrial and Digital Sovereignty, Bruno Le Maire. , underlining that "EDF can count on the full support of the State for this industrial project on an unparalleled scale for 40 years".

The renationalization of EDF will mean fulfilling one of the promises made during the campaign for his re-election last March by the French president, Emmanuel Macron, who had defended the nationalization of the company to reinforce French energy independence and as a pillar of the strategy to achieve the ambition of zero emissions through the construction of new nuclear plants.

Last April, EDF completed a capital increase of 3,150 million euros, in which the State subscribed some 2,700 million equivalent to its weight in the company, in order to finance the Group's development operations between 2022 and 2024; strengthen the credit rating and its access to financing markets; and more generally, to strengthen the financial flexibility of the electricity company.

The French 'utility' obtained in 2021 a net attributable profit of 5,113 million euros, which is practically eight times more than the result of 650 million euros recorded the previous year, while the gross operating result (Ebitda) increased by 11.3%, up to 18,005 million.

Likewise, during the past year the company reached a turnover of 84,461 million euros, 22.3% above the revenue recorded in 2020. However, EDF's net financial debt increased to 43,000 million euros .

The electric company began trading on the Stock Exchange in 2005 and reached a historical maximum price of over 75 euros in November 2007.

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