EDF mulls selling UK electricity distribution business

05 May 2009

French energy giant, Électricité de France (EDF) is mulling the sale of its electricity distribution business in the UK in order to cut the mountain of debt it has built up due to the hefty acquisitions made in the US and the UK in the past nine months.

The Financial Times reported yesterday that the EDF's board was considering selling the electricity distribution business managed by EDF Energy UK, the wholly-owned subsidiary of the EDF Group for approximately £5 billion in order to reduce its debt of £22.3 billion.

The EDF board is considering as to whether the company should focus only on its overseas business in power generation since it has already committed to huge investments in the nuclear generation sector both at home as well as abroad.

This hefty debt has been incurred by the company, when it acquired British Energy for $23.18 billion in September (See: EdF to acquire British Energy for $23.2 billion)  and had taken a 49.9 per cent stake worth $4.5 billion in December in a major American nuclear operator, Constellation Energy. (See: EDF Group acquires controlling stake in US nuclear giant Constellation Energy)

Last week, EDF acquired 493 acres of land at Bradwell in Essex, since this site had existing nuclear reactors, which came into its ownership after the acquisition of British Energy. (See: EDF, E.ON and RWE npower acquire sites to build nuclear reactors in UK)

EDF Energy generates around 6 per cent of the UK's electricity and supplies electricity to 7.9 million homes and businesses through its public networks.