Leaky Dreadnought

2 December 2002 By John Paul Rathbone

In just a year, the giant French utility has turned from an Empire builder into a potential basket case. At home, unions have rejected proposed pension reforms. Abroad, operations aren t looking that good either.

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Four trade unions rejected on Monday the French government's plans to reform pensions in the stateowned energy industry, potentially complicating pension reform elsewhere in France as well as the planned privatisation of utility giant Electricite de France.

The government wants to move EdF's pensions into the standard statesponsored system so it can prepare the group for partial privatisation in 2004. EdF has about E40bn of unfunded pension liabilities.

Credit agency Moody's downgraded EdF's debt by three notches to tripleA in late November because it is not clear how large EdF's pension and nuclear liabilities will be when it loses its government guarantee upon privatisation.

Leaky Dreadnought

2 December 2002 By John Paul Rathbone

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