The French finance ministry is studying several scenarios for restructuring state-owned utility EDF, including spinning off its nuclear power generation activities into a standalone unit, sources familiar with the situation said. EDF, which is 83 percent owned by the state, has hefty net debt of 31 billion euros ($36.7 billion) and is poorly placed to make the investments needed to upgrade its ageing nuclear plants. Several sources said that EDF’s board had not been consulted on the subject and that the firm’s management has no working groups reviewing possible restructuring scenarios. EDF shares rose more than three percent in morning trade on speculation about a restructuring, traders said. BFM TV reported on its website that in one scenario wholesale power prices would be based on EDF’s nuclear operating costs and set by energy regulator CRE, similar to the way the CRE sets tariffs for EDF’s power grid units Enedis and RTE. Earlier this week UBS published a note saying a separation of EDF assets following the model of Germany’s RWE and Innogy could potentially release significant value. UBS said one company similar to Innogy could hold EDF’s grids, renewables and retail activity, while a second company could hold EDF’s nuclear and thermal activities. “When he was working at Bercy, President Emmanuel Macron had talked about breaking up EDF, separating nuclear from the rest,” said a third source familiar with the situation. In a March 2016 speech to parliament, Macron raised the possibility of delisting EDF’s nuclear activities, saying that while a bourse listing is pertinent for selling nuclear reactors abroad, it is not optimal for producing nuclear power in France.
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