Short circuit

23 April 2020 By Christopher Thompson Follow @CGAThompson

Slumping power demand may force $23 bln EDF to seek fresh capital. The state utility might need at least $4 bln – but likely more. Having pledged to bail out carrier Air France, President Emmanuel Macron’s plan to back away from owning the means of production is fast unravelling.

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Falling electricity demand and lower power prices during the coronavirus outbreak could leave Paris-listed EDF in need of a capital injection by the end of 2020, according to a media report by Reuters on April 22.

Citing an anonymous source close to the French utility company, in which the French state holds 83.5%, the report said it may need billions of euros to help tackle net debt which stood at 41.1 billion euros at the end of last year.

The source added that although EDF’s production was hedged for this year, “difficulties will come at the end of 2020 and capitalisation may be necessary at that time.”

The need for a recapitalisation has not been discussed by EDF’s board yet, the source said.

A spokesman for EDF declined to comment, saying that the group had strong liquidity.

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