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France said last week it wanted to fully nationalise EDF, in
which the state already holds an 84% stake, without explaining
how it would do so. In a statement, the finance ministry said it
would clarify its plans before the market opens on July 19 at
the latest.
Taking EDF back under full state control would give the
government greater licence to restructure the debt-laden group
that runs the nation's nuclear power plants, as it contends with
a European energy crisis.
A finance ministry source said the suspension of EDF shares,
which was requested by the company, was temporary and trading
would resume once the government had made clear how it would
fully nationalise the utility.
EDF has been grappling with extraordinary outages at its nuclear
fleet, delays and cost overruns in building new reactors, and
power tariff caps imposed by the government to shield French
consumers from soaring electricity prices.
Two sources told Reuters this week that the government was
poised to pay up to 10 billion euros to buy the 16% stake in the
group it does not already own, after including the purchase of
convertible bonds and a premium it is expected to offer to
minority shareholders.
The sources said the state wanted to move quickly and would
probably launch a voluntary offer on the market rather than push
a nationalisation bill through parliament.
"The government may want to offer a sufficient premium to avoid
legal challenges and resulting delays to the offer," JPMorgan
analysts said in a note.
EDF did not give a reason for requesting the suspension of its
shares, which have risen 30% since the nationalisation
announcement, increasing the cost of buying out minorities. The
finance ministry source said the move was "among routine tools
to manage financial markets in this kind of situation".
"I would imagine it is to stop the price going up to a point
that the French government ends up having to pay over the odds
for the remaining shares in issue," a London trader said.
The shares closed at 10.2250 euros on Tuesday.
In a sign of how badly reactor outages are affecting the
company, which is expected to post a loss this year, EDF said
power generation at its French nuclear reactors fell by 27.1% in
June from a year earlier after the discovery of stress corrosion
took several sites off line.
EDF has said it expects an 18.5 billion euro hit to its earnings
in 2022 from production losses, and further losses of 10.2
billion euros from the energy price cap.
($1 = 0.9964 euros)
(Additional reporting by Joice Alves in London; Writing by
Silvia Aloisi; Editing by Louise Heavens, Edmund Blair and Jan
Harvey)
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