Électricité de France (EDF) is the world’s largest utility company with 2009 revenues of €66.34 billion and 2009 profits of €3,905 billion. It operates a diverse portfolio of over 120,000 megawatts of electric generation capacity in Europe, Latin America, the Middle-East, Asia and Africa.
The French group EDF proposed a meeting this Tuesday with its U.S. partner Constellation to try to resolve the crisis around building the EPR nuclear power plant project in Maryland.
Constellation Energy Group Inc offered to transfer its half-interest in a nuclear joint venture to France’s Electricite de France SA on Friday at a bargain price
The U.S. utility was willing to transfer its stake in the UniStar joint venture to EDF for $1, plus $117 million in reimbursement costs. This is an effort to keep alive a plan to build a third nuclear power reactor at the Calvert Cliffs plant in Maryland, said Constellation Vice Chairman Michael Wallace in a letter.
Earlier this month, the U.S. utility withdrew the proposed new-generation reactor at Calvert Cliffs, a unilateral decision that could bring a halt to a contract of several billion dollars.
The two companies have been trying to put forward ideas for continuing the project. Constellation proposes to sell its shares in EDF Unistar, a joint venture formed by the two partners to complete the proposed Calvert Cliffs. The U.S. Company asks for a symbolic dollar over $ 117 million in reimbursement of past costs.
For its part, EDF said it is impossible to resolve the crisis on Calvert Cliffs unless both partners address another issue beforehand: an option that allows the U.S. utility to sell up to EDF to 2 billion dollars in non-nuclear assets.
The problematic option is based on a 2008 option agreement with EDF to buy 49.9% of the nuclear division of Constellation. The American group was then experiencing serious liquidity problems because of the financial crisis.
This option, which expires at the end of the year, allowed constellation to sell to EDF up to two billion dollars in power plants. Since that agreement the value of those power plants has plummeted. If Constellation exercised this option, the American company would realize a solid gain and the French a loss.
For its part, EDF considers that improving the financial situation of his American partner nullifies the option.
The meeting proposal by EDF would attempt to put all of the disputes on the table. The French group would be represented by Thomas Piquemal, the group finance director, financial advisors from the Lazard investment bank and lawyers for EDF.