EDF Postpones Edison Stake Sale to 2027 as Middle East Crisis Hits LNG Supplies
EDF's Strategic Delay and Impact on Edison Amid Middle East LNG Disruptions
By Francesca Landini and Elvira Pollina
Background of the Stake Sale
MILAN, May 27 (Reuters) - French utility EDF has postponed a plan to sell a stake in its Italian subsidiary Edison to next year as the disruption to liquefied natural gas supplies due to the Iran conflict drags on, two sources with direct knowledge of the matter said.
The move underscores the wider impact of the Middle East crisis. The French energy giant had started working with advisers last year to review options on Edison, including the sale of a minority stake to a financial partner and an initial public offering, as it aimed to raise cash for investment in its nuclear reactor fleet.
Regulatory and Market Challenges
• A change in the regulatory framework in Italy and, more importantly, the disruptions to energy flows from the Middle East have hurt the business of Edison, Italy's second-largest gas importer, the people said.
EDF's Official Statement
• "At this stage, we are still assessing all the available options, notably in light of the various recent developments, and are closely monitoring market conditions," EDF said in an emailed comment to Reuters.
• Edison was not available for comment.
Timeline and Business Adjustments
• Last month the companies delayed a decision on the potential sale to at least this month, Reuters reported.
• The sources said EDF advisers are now working to tweak Edison's business plan in order to factor in LNG disruptions.
Future Prospects and Investor Discussions
• Discussions with potential investors could restart from September, one of the sources added.
• A transaction will only materialise if the Middle East crisis does not weigh significantly on Edison's valuation, the source said.
Valuation and LNG Supply Issues
• Sources told Reuters last year that Edison could be valued at €7 billion to €10 billion ($8 billion to $11.6 billion).
• Edison, which holds a long-term contract with QatarEnergy for the supply of 6.4 billion cubic metres of gas per year to Italy, said on Monday its Gulf supplier notified it of the cancellation of five additional LNG cargoes, extending force majeure to mid-August.
($1 = 0.8597 euros)
(Reporting by Francesca Landini and Elvira Pollina in Milan; Additional reporting by America Hernandez in Paris; Editing by Anousha Sakoui and Emelia Sithole-Matarise)
