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    MNM Service What is it? Latest Edition Search Archive
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World Energy News From the Communications Centre Contributed by Aristide Mbiock IJmuiden, NL, 17th June 2002 - Ref.:0206art14 World Energy News is a service that is brought to you by IFRF NET in the IFRF Weekly newsletter, the Monday Night Mail. The articles are reprints from fully referenced links for reputable news agencies/sources and are selected on the basis of potential interest to IFRF Individual Members. The information in these articles should not be seen as the views or opinions of the IFRF, its Officers or staff of IFRF NET; nor should these people be held responsible for the quality or accuracy of any statements made. Nevertheless, we do our best to ensure the accuracy of the texts.
GdF
privatisation could face hold-up The privatisation of Gaz de France, the state gas company to be floated after this weekend's general election, could be delayed by problems in unravelling its ties with Electricité de France, according to French officials. GdF is expected to be among the first groups prepared for sale by a new government after Sunday's poll, although the state will probably retain a majority stake. Analysts at CAI Cheuvreux estimate that GdF is worth €5bn ($4.7bn) to €8bn. An offering would be a useful bonus for a government that will be struggling to balance its budget in the next two years in line with the eurozone stability pact. GdF this week unveiled a streamlined management structure as it prepares for privatisation and further energy market liberalisation. But EdF has warned privately that GdF is being over-enthusiastic, saying it will be difficult to separate quickly the 73,000 staff in France who work as joint service agents for EdF and GdF. Because it is bigger, EdF is reckoned to be responsible for about three-quarters of the French service staff. The two groups also share information technology and billing systems in France, but the processing of unravelling them is under way. EdF recommends privatising both groups at the same time. This could accelerate the privatisation of EdF - valued at about €80bn - but hinder the rapid flotation of GdF, whose strategic adviser is Société Générale. Investment bankers have been eagerly courting both GdF and EdF. "Privatisations are one of the biggest fee earners for bankers and everyone will be fighting to be part of the action," said one senior investment banker yesterday. Typical merger and acquisition fees are between 0.5 per cent and 1 per cent of the value of the target. But with privatisations, banks are usually paid between 1.4 per cent and 1.8 per cent of the value of a retail offering. Banks have recently earned good fees from the flotation of Autoroutes du Sud de la France, the motorways operator, and the sale of 1.5bn of shares in Renault. However, GdF and EdF will have to overcome several obstacles before their shares can be sold to investors. First, the new government - expected to be a rightwing administration loyal to President Jacques Chirac - must take a political decision in the face of inevitable protests from trade unions. The National Assembly must then pass legislation to convert the groups into public companies, and the company accounts must be brought into line with private sector norms. Another issue is the need to clarify the systems under which state companies pay pensions to past and present employees. EdF also has the unquantified cost of decommissioning its nuclear power plants, and the fate of its spent nuclear fuel.
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