France plans to take full control of power group EDF, a nuclear energy specialist that has been grappling with high debt, production outages and conflicting demands from its state shareholder as it gears up to try to process its biggest orders for new reactors in decades.

The takeover, announced by prime minister Élisabeth Borne on Wednesday, would close a rollercoaster chapter for the former monopoly, which has included a shelved government attempt last year to restructure the sprawling company, still 84 per cent controlled by the state.

“I confirm to you today that the state intends to control 100 per cent of EDF’s capital,” Borne told lawmakers as she set out priorities for the new government following Emmanuel Macron’s re-election as president in April and legislative elections in June. She did not detail how the operation would take place, or when.

Shares in the company, which was listed in 2005, soared 14.3 per cent after Borne’s speech. The stock held by minority shareholders is worth roughly €5bn at current market prices.

Known as Electricité de France when the utility was created just after the second world war, EDF’s capital was opened up to private investors with the argument it would bring more financial discipline and transparency to a group with a history of internal quarrels and that is sometimes described as a quasi state-within-a-state.

But its listed status has proved increasingly problematic, including this year when Paris forced EDF to foot the bill for its cap on energy prices to protect households from soaring costs, now exacerbated by Russia’s invasion of Ukraine. The move sparked an outcry from minority shareholders and the stock, which has sunk almost 90 per cent since a 2007 peak, took a hit.

As well as giving the French government greater licence to intervene at EDF, a full renationalisation — which the group’s powerful unions have been in favour of in the past — might allow Macron to score political points. The president’s centrist party lost its majority in the lower house of parliament in June and will now have to wrangle with lawmakers on the left and right to try to pass bills.

“One of the reasons to do this now is for the symbolism of it. A nationalisation in France, even if this isn’t truly one as it is already state-owned, will please some parts of the left and the right,” said one banker who has previously worked with the company.

Financially, full state control would also have the merit of further decreasing EDF’s borrowing costs. The group, which has been tasked by Macron with building six new nuclear reactors in France in the coming years at an estimated cost of about €52bn, will have to find ways to fund the venture, beyond any state financing.

But the move may not resolve all of EDF’s problems. The group has faced cost overruns and long delays at a handful of flagship reactor projects in Britain and France, raising concerns over its ability to build more in future. Corrosion problems at some of its existing 56 reactors in France have torn a hole in its finances as production drops to multi-decade lows — its core profit is due to take a €18.5bn hit from that alone this year.

“It’s a message to the unions and to the left,” Denis Florin of energy consultancy Lavoisier Conseil said of the nationalisation plans. “Beyond that, the question is what it will do to change things operationally, beyond giving EDF a more secure financial structure.”

The French state took part in a recapitalisation of EDF this year. Over the years the company has branched into renewable energy and has sought to export its atomic technology to countries such as Britain and China. It has had to contend with government pressure before, including after being pushed to absorb ailing reactor designer Areva in 2017.

The shake-up in its capital structure may have repercussions elsewhere too. Energy experts in the UK said it raised further questions about the speed with which new nuclear projects could move forward in Britain.

A planning decision on EDF’s proposed £20bn plant at Sizewell on England’s east coast is due by the end of Friday.

Additional reporting by Nathalie Thomas in London



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