France’s Veolia courts Chinese investment

7th February 2005, Comments 0 comments

PARIS, Feb 7 (AFP) - The French utilities group Veolia Environnement foresees investment in the company by Chinese institutions "in the next two years", Veolia chief executive Henri Proglio said in an interview published Monday in the French business newspaper Les Echos.

PARIS, Feb 7 (AFP) - The French utilities group Veolia Environnement foresees investment in the company by Chinese institutions "in the next two years", Veolia chief executive Henri Proglio said in an interview published Monday in the French business newspaper Les Echos.

"Surely one day the Chinese institutional (investors) will enter the capital of Veolia and that is a subject that I had already raised last week in Beijing," Proglio said, adding such a scenario was possible "in the next two years."

The chief executive pointed to China's "gigantic savings", but noted that China still lacked the kind of market organisation that would allow it to take advantage of widespread investments.

"And the financial means at its disposal should first serve to invest in local infrastructures," he said.

Proglio also said he wanted the core institutional shareholders of the group to raise their total stake to 30 percent from about 20 percent currently.

The market welcomed the news that Veolia's CEO wanted to build up its core shareholders and planned to attract Chinese institutional investors in the next two years, dealers said.

The price of Veolia shares was up 0.68 percent at EUR 28.08 in midday Paris trading, while the CAC 40 index was showing a gain of 0.37 percent at 3,972.61 points.

"That is good," a Paris-based dealer said, adding "there are too many banks in Veolia's shareholding structure, and there will come a time when these banks will want to place their shares."

"So Veolia has nothing to gain from keeping its current shareholding structure," he said.

French state bank CDC holds 8.39 percent of Veolia, Societe Generale 6.57 percent and Groupama 5.76 percent.

© AFP

Subject: French News

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