02.06.09 EDF may sell UK electricity business
EDF Energy has announced that it is likely to use the services of Deutsche Bank for auctioning the largest electricity distribution network in the United Kingdom. Speculation that EDF Energy would be forced to conduct the sale in an attempt to ease its debts had been rife for some time and the plan was confirmed last week, with Deutsche Bank likely to start looking for bidders over the coming months.
EDF Energy took on a significant amount of debt whilst negotiating its purchase of British Energy last year and has been looking for ways to ease the financial burden ever since. The electricity distribution network which is set to be sold is currently responsible for providing power to approximately eight million homes across the south and east of the country.
Whilst the sale of the network is far from ideal, particularly since it brings in a significant profit, it is a move viewed as relatively preferable to the hypothetical sale of any French network.
Officials at Deutsche Bank are likely to be happy that they are closing in on this deal with EDF Energy, particularly after Merrill Lynch provided them with advice about the deal with British Energy (Merrill Lynch sued Deutsche Bank earlier this year after the latter took several of the former's most senior bankers).
Official confirmation of Deutsche Bank's involvement is likely to come in the near future.
In related news, EDF Energy is planning on constructing four new nuclear reactors in Britain. Each reactor will cost approximately five billion euros.
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