PARIS, Nov 12 (Reuters) - EDF’s 18 billion pound ($27.4 billion) project to build two nuclear reactors in Hinkley Point, Britain is so expensive and so risky that it puts the survival of the French utility at risk, an association of employee-shareholders said on Thursday.
EDF Actionnariat salarié (EAS) said in a statement that the interests of EDF are gravely threatened by the Hinkley Point project, which it calls “a financial catastrophy foretold” in which EDF has nothing to gain and everything to lose.
“EAS asks the management of EDF to stop this risky project, whose financial risks are to big for our company and which could put EDF’s very survival at risk,” the association said.
EDF staff own 1.72 percent of the utility’s capital, making employees the second-largest shareholder after the state, which hold 84.5 percent, according to ThomsonReuters data.
Last month, EDF announced a partnership with Chinese utility CGN to build Hinkley Point, but the two companies have not yet made the final investment decision to go ahead with the project, which EDF reluctantly agreed to finance on its already stretched balance sheet after other partners pulled out.
EDF, which already has to borrow money every year to pay its dividend, faces a 55 billion euro upgrade of its nuclear fleet over the next decade, will spend some five billion euros to install Linky smart meters in coming years and needs to invest billions in the reactor unit of Areva, which it plans to buy next year.
Standard & Poor’s last month warned that it might downgrade EDF’s debt if it goes ahead with Hinkley Point, because of the project’s high execution risks and substantial investment needs. ($1 = 0.6572 pounds) (Reporting by Geert De Clercq, editing by William Hardy)