Plan to keep Suez French may be hiting wall

8th June 2006, Comments 0 comments

MILAN, June 7, 2006 (AFP) - The Italian electricity group Enel, which has seen its ambitions to acquire French group Suez blocked by a plan for Suez to buy Gaz de France (GDF), signalled on Tuesday that time was playing in its favour.

MILAN, June 7, 2006 (AFP) - The Italian electricity group Enel, which has seen its ambitions to acquire French group Suez blocked by a plan for Suez to buy Gaz de France (GDF), signalled on Tuesday that time was playing in its favour.

Meanwhile, there were signs in Paris that the defensive scheme to keep Suez French was running into reticence among supporters of the beleaguered centre-right government, but French Industry Minister François Loos insisted in parliament on the need to create an "energy champion".

The government-backed plan, which requires parliamentary approval, is for state-controlled GDF to be acquired by Suez, a private group, contrary to previous statements that GDF would not be privatised.

The chief executive at Enel, Fulvio Conti, told the Italian newspaper Corriere della Sera on Wednesday in answer to a question about strategy by Suez that there were "no closed chapters in the world of energy".

He said that changes occurred in scenarios as markets changed and became increasingly global.

Conti said: "Time is playing in favour of the markets, it takes time and determination."

Asked about the planned takeover of GDF by Suez, he said: "I observe and I continue to think that it is an anachronism to stay enclosed within frontiers."

He said that a line of credit of EUR 50 billion that Enel had set up with banks with a view to acquiring Suez remained available subject to time limits.

In more general terms, he said Enel would inevitably expand abroad. "Expansion to the east is fundamental but it is not the only zone (of development)," he said, mentioning Turkey "where the government intends to privatise some distribution companies".

He also said that Russia "wants to offer for sale big parts of regional companies and "something" might be announced in the next few weeks.

In Paris, sources at the National Assembly said on Tuesday that Prime Minister Dominique de Villepin had shown caution about presenting legislation permitting the state to reduce its interest in GDF, which is necessary to enable the Suez-GDF defence to go ahead.

The proposed deal would leave the government in control of about 34 percent of GDF.

Speaking in the National Assembly on Wednesday, Minister Industry Loos told lawmakers: "Regarding Gaz de France and Suez, we have two objectives: first to create a real energy champion and to give every chance to companies in this sector.

"Secondly, to provide a public energy service that is capable of guaranteeing supply security for our country, and in which the state remains the biggest shareholder."

Separately sources close to the French government and to the National Assembly said some members of the right-wing UMP party in parliament were reticent about, or even hostile to, the plan, which is to be raised during a debate on June 14 on energy supplies in France.

One UMP personality, who declined to be named, said that given recent political controversies surrounding the government "it would not necessarily be very clever to go ahead with this (Suez-GDF) merger."

Loos said that he would organise a parliamentary debate on the deal on June 14-15 to measure support for the plan.

Government spokesman Jean-François Copé said on Wednesday: "For the moment, we are exactly in line with the timetable that was laid down".

Copyright AFP

Subject: French news

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