Make-or-break EDF restructuring talks seen concluding in March: sources

Make-or-break EDF restructuring talks seen concluding in March: sources

News: Make-or-break EDF restructuring talks seen concluding in March: sources.

PARIS (Reuters) – Talks between Paris and Brussels over an overhaul of the French state-controlled energy company EDF are entering the final stages. The result is expected for the end of March. Two union sources and a third person familiar with the discussions said.

One of the union sources that was briefed on the matter said there was reason to be optimistic that an agreement could be reached after discussions over the past few weeks, although the outcome was not yet certain.

EDF shares rose more than 6% at 1027 GMT on Thursday.

France and the European Commission have been arguing for months over a proposed reform of the utility and its nuclear arm, as part of a reorganization known as the Hercules project, partly aimed at helping the indebted group better recover its costs.

Paris and Brussels disagreed on the extent to which the nuclear power plant and various departments of EDF should be kept separate in order to avoid creating a structure in which all businesses would benefit from some form of State aid.

Talks about a deal that will have to reset the price at which EDF sells nuclear power to third-party suppliers are currently at a stage of transition.

“The negotiations are coming to an end and there are some elements that are viewed as positive (by France),” said the union source, who was briefed on the talks. A second union source said a “final” meeting was planned for late March.

EDF and the French finance and energy ministries declined to comment.

“The Commission is in constant contact with the French authorities on the reform of regulated access to nuclear energy and hydropower concessions,” a Commission spokesman said in a statement.

“We cannot anticipate the point in time or the result of these contacts.”

The French government previously stated that an agreement had not yet been reached, and EDF boss Jean-Bernard Levy said in a newspaper interview published this week that the EU wants to wind up the company, a solution France opposes .

“There is an absolute red line: there will be no dissolution of the EDF,” Finance Minister Bruno Le Maire told BFM Business TV on Wednesday.

The EDF unions have been vehemently opposed to any reform of the group, including an intermediate scenario of ring fencing businesses presented by the company and the French government, on the grounds that this could be the prelude to a complete breakup.

Unless an agreement with Brussels is reached soon, it may become more difficult to lead reform through the French parliament before the 2022 presidential election. Delays, in turn, will penalize EDF and its ability to invest, the company warned.

“The National Assembly’s schedule is getting very tight, and if it doesn’t come to a conclusion soon, it will last until 2022. And politically it will be difficult to deal with it in the middle of an election campaign,” said Marie-Noëlle Battistel, a specialist in energy policy MP said to Reuters.

Reporting by Benjamin Mallet, Gwenaelle Barzic and Elizabeth Pineau. Additional reporting from Leigh Thomas. Letter from Sarah White. Arrangement by Toby Chopra and Mark Potter

Original Source © Reuters

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