EDF Chief to Step Down as France Proceeds With Nationalization

 EDF Chief to Step Down as France Proceeds With Nationalization Electricite de France SA Chairman and Chief Executive Officer Jean-Bernard Levy will step down amid plans to nationalize the debt-laden utility as it battles widespread reactor shutdowns and soaring costs.

A process to replace Levy, who took the helm in 2014, has begun, the Finance Ministry and EDF said in separate statements. While his mandate ends in March, the government aims to have a successor in place from September, Finance Minister Bruno Le Maire said in an interview on Europe 1 radio on Thursday.

France this week announced plans to nationalize the struggling nuclear giant to help it ride out Europe’s worst energy crisis in a generation. Such a move “gives us the opportunity to be more independent in energy in the coming years,” Le Maire said. “It’s a strong, strategic, and necessary decision.”

No decision has yet been made on whether to split the roles of CEO and chairman, Le Figaro reported earlier on Thursday.

EDF shares slipped 0.5% at 9:22 a.m. in Paris, after surging 15% on Wednesday following news of the government’s plans. Prime Minister Elisabeth Borne said the state wants to own 100% of the utility, up from the current 84%.

“The nationalization process may be delivered either via nationalization law, which would require political agreement or via share offer,” Piotr Dzieciolowski, an analyst at Citigroup Inc., said in a note. The latter is more likely as an “easier and probably cheaper option,” and there’s a “high probability” it will be done at a premium to the current share price, he said.

“The roadmap for the future leader of EDF is to produce more … as quickly as possible, it is the construction of six new EPR nuclear reactors and it is the continuation of the commitment to renewable energies”, Finance Minister Bruno Le Maire told Europe 1 radio.

He did not suggest a replacement for Levy, 67, who has been at the helm of the company since 2014 and was due to step down by March 2023, but he outlined some job requirements.

“It has to be someone who masters the major industrial programs… and who has a sense of compromise. With the trade unions, with the European Commission, it will be necessary that we all find a compromise on the transformation of this company,” he said.

EDF has become a major headache owing to years of delays on new nuclear plants, with budget overruns in the billions of euros, while half of its aging reactors in France are offline, partly due to corrosion problems.

EDF said Levy, who criticized the government this year for making it sell nuclear energy at a lower cost than rivals, was prepared to step down as soon as a successor was found. Le Maire said changing CEO was not a punishment for his criticism.

Citi analyst Piotr Dzieciolowski said the government was likely to fully nationalize EDF via a share offer rather than law, calling it an “easier and probably cheaper option, and we think there is a high probability it will be done at a premium to the current share price.”

Buying the shares the government does not already own at the current prices would cost about 5 billion euros ($5.1 billion).