EDF launches hunt for new CEO as France plans full nationalisation

Le Maire said changing CEO was not a punishment for his criticism. NO QUICK FIX Citi analyst Piotr Dzieciolowski said the government was likely to fully nationalise EDF via a share offer rather than law, calling it an "easier and probably cheaper option, and we think there is high probability it will be done at premium to 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).

EDF and the French government are seeking a new boss to overhaul the power utility and build more nuclear reactors, they said on Thursday, a day after France announced it would fully nationalize the debt-laden company. EDF, in which the state already has an 84% stake, is one of Europe's biggest utilities and is central to France's nuclear strategy, which the government is banking on to blunt the impact of soaring energy prices exacerbated by the war in Ukraine.

Less than two decades after EDF was floated on the stock market to much fanfare, the utility is beset by outages at its aging nuclear plants, has suffered costly delays on new reactors, and has borne the brunt of government measures to shield households from surging energy costs. "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 Jean-Bernard 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," Le Maire said.

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.

NO QUICK FIX 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 aa t 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). Analysts said taking full control of EDF would not solve the utility's problems overnight.

"EDF's operating problems on existing nuclear plants and building new ones are not going to be directly impacted by nationalization," said Denis Florin of energy consultancy Lavoisier Conseil. Although France's new parliament is fragmented, most parties support championing France's nuclear industry.

"The government thinks it can build a tactical majority in parliament around EDF, potentially accelerating the re-organization of the group," Florin added. Shares in EDF traded at about 9 euros on Thursday, 90% down from the 2007 high and far below the 32 euros per share listing price in 2005.

Barclays in a research note put a price target of 11.10 euros on EDF shares. ($1 = 0.9791 euros)