Home News Sarkozy ticks sell-off list

Sarkozy ticks sell-off list

Published on 12/04/2004

PARIS, April 11 (AFP) - French Finance Minister Nicolas Sarkozy has sketched an outline of state-owned capital that could be opened up to private investors, but fended off charges his government will dump the country's key energy sector.

“There will be no privatisation of EDF and GDF, neither today, nor tomorrow,” he told lawmakers last week in reference to Electricite de France and Gaz de France, the country’s two huge wholly-owned public utilities.

It was a far cry from comments by Sarkozy’s predecessor Francis Mer, who had said in late January that “all public enterprises are liable to be privatised.”

France must respect European Union directives on competition in the electricity and gas markets, but rules do not require privatisation of groups like EDF-GDF.

The government had initially considered changing their statutes to turn them into corporations in which the state could one day reduce its stake below 50 percent, but ran into fierce opposition from unions and many company directors.

A draft law concerning the change was to be vetted by the state council – France’s highest administration – on Thursday, but that was postponed until April 22 and a day of strikes and protests took its place, causing power outages across the country, including one at the Versailles palace west of Paris.

Ready for sale however is 30-40 percent of the jet engine maker Snecma, in which the state holds a 97.2-percent stake.

“Snecma will see its capital opened up before the summer and this capital will be opened to the French individually, not simply reserved for institutional investors,” Sarkozy told the parliament during a question and answer session on Wednesday.

“Selling assets to settle a nation’s debt is a healthy act of good management,” the finance minister said.

“We should think of all the salaried workers in what are now public companies.

“They have a right to participate in the development and benefit from the fruit of these businesses by becoming shareholders.”

The nuclear power group Areva is also prepped to open its capital to private investors, but a spokesman told AFP Thursday that two windows of opportunity existed for such an operation.

The first was essentially now and thus highly unlikely since no plans have been announced, while the second was towards the end of the year.

Aeroports de Paris, the capital’s airport operator which also develops airports abroad is on the list as well, with the government announcing in October that it planned to change the operator’s statute, but retain a majority shareholding.

In December the cabinet of Prime Minister Jean-Pierre Raffarin ruled out a full privatisation of the southern autoroute group ASF, in which it owns 50.3 percent of the shares, but suggested it could sell parts of two other highway operators, one in the north and east, and one between Paris and the Rhine and Rhone rivers.

Meanwhile, the parliament has voted a law authorising the state to reduce its stake in France Telecom from the current level of between 50-51 percent.

The next share sale could well see it go below 50 percent but no such plans are imminent.

Finally, on Thursday the flag-carrier Air France launched a public offer for shares in the Dutch airline KLM that runs until May 3.

The share swap should also result in the state’s Air France stake falling below 50 percent.

                                                                 Subject: French news