French government mulls cost of EDF nationalisation

The French government is considering spending potentially up to €10bn to take energy giant Electricite de France private, it was reported on Tuesday.

The French government is the majority shareholder in EDF with 84%, and last week confirmed plans to nationalise the company, to allow it to overhaul the debt-laden business.

The stake held by minority shares was worth around €5bn when the plans were first announced on 6 July.

But according to Reuters, citing two unnamed sources with knowledge of the matter, the cost of buying up the remaining 16% could be as high as "almost €10bn".

It is thought that the state will likely launch a public offer at a premium to the stock price, Reuters said, as it would take too long for nationalisation legalisation to go through parliament. The government will also need to buy €2.4bn of convertible bonds.

It is understood that the buyout will take place in October or November, the source added.

Neither France’s economy ministry nor EDF have commented on the report.

EDF is one of the UK's biggest energy suppliers. It has a portfolio of 36 wind farms in the UK and is developing the Hinkley Point and Sizewell nuclear sites.

As at 0900 BST, shares in EDF had jumped 5%.