Friday, 14 May, 2021

Why nuclear is siphoning off the state shareholder


Bercy is looking for funds to bail out EDF and Areva, which need 9 billion euros. After the sale of Engie shares, is it the turn of PSA or Renault?

The timing is not the most favorable for the State shareholder

It is the beginning of the great maneuvers in the nuclear industry. To finance them, the state must find new money. Last week, when the European Commission gave the green light under conditions to the Areva rescue plan, Paris sold 4.1% of Engie’s capital for 1.14 billion euros. A mediocre operation, the action of the former GDF Suez having fallen by more than 25% in 2016. The sale of Engie shares aroused the fury of the unions. “Recapitalizations should not be financed by disposals of public assets and the sale of family jewels,” protested FO in a press release. The CFE-CGC denounces “the inconsistency of the State shareholder which sacrifices any strategic vision to a very short-sighted financial shareholder management”.

“The State advocates good governance that it does not apply to itself”

André Loesekrug-Pietri, president of the A Capital fund, wonders about the strategy of the State Participation Agency (APE): “The State advocates good governance that it does not apply. to himself. Over the past three years, no less than three presidents have succeeded at the head of the EPA. In twelve months, the portfolio of its listed securities fell by 11.5% when the CAC 40 gained nearly 5%, ie a potential loss of some 8 billion. It is energy in the midst of a crisis (Fukushima disaster, drop in electricity prices) that is weighing down the balance sheet of the APE. The sector represented 81% of the portfolio in 2008. Today only 46%. “What is a little annoying for the State is that it was a prisoner of the calendar around Areva”, indicates a strategist of the broker Aurel BCG. Tomorrow, it is that of EDF which will be invited to the menu of the State.

Over the next few months, the electrician and the nuclear group will be recapitalized to the tune of 4 and 5 billion euros. A shareholder of the two companies at more than 80%, the State has undertaken to participate for 3 billion in the capital increase of EDF and for 4.5 billion in that of Areva. The APE, present in 81 companies, has a portfolio of 90 billion euros, two thirds of which come from listed companies. Its room for maneuver is limited, however, as the Agency is not authorized to recapitalize a company using the fruits of its dividends. In order to carry out its operations, it must draw on its earmarked account. As of December 31, 2016, this pot showed a positive balance of 3.7 billion. With the sale of Engie shares, it now amounts to 4.8 billion. It therefore lacks nearly 3 billion to bail out Areva and EDF. This money, the State must find it quickly because the capital increase of EDF is imminent. Perhaps as early as February 15, the day after the announcement of the electrician’s 2016 financial results, as had been indicated by its management.

A strategy in question

In recent months, the State has shed several blocks of Safran shares. He also sold the 60% that he held in the airports of Lyon and Nice. What will he give in now? The PSA title has taken on color. The state has often said that it was not intended to stay with the automaker. However, it should not move, because the APE believes that the PSA title has room for improvement. On the other hand, the state could lighten up at Renault, the price of which has also risen. Finally, it remains to be seen whether the EPA strategy is relevant. This is not the opinion of André Loesekrug-Pietri: “The State is in the daily management and acts less in the long term. It invests massively in energy production, whereas today the added value is shifting towards innovation, smart grids, software, batteries… ”

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