EDF sends invitation to potential £4 billion asset investors

French energy company EDF has started sending out documents to prospect buyers for its £4 billion power supply network in the UK. On offer are three electricity stations that serve about 20 million people in London, and the eastern and south eastern parts of England. The move is in line with EDF’s plan to lessen its financial debt by €5 billion by the end of next year.

Anticipated to be launched early next month, the sale will come after Ofgem, the UK energy regulator, determines the allowed proceeds of the Distributor Network Operators (DNO).  EDF is expecting to receive the first bids around mid-January, with binding bids due by the end of next year’s first quarter.

The regulated cash flows of EDF’s assets are drawing profound interest from industry investors and infrastructure funds that are eager to join with business firms that have the experience on running DNOs.

Canada Pension Plan is searching for a reliable UK consortium to team up, while its Canadian peer Borealis had already collaborated with Scottish and Southern Energy. Meanwhile, infrastructure funds from 3i, IFM, Macquarie and National Grid are preparing bids as well.

More groupings are expected to come forward before the sale launch of EDF, as other major industry players like Alinda, Blackstone, GIP and RREEF are still deciding whether they will participate.

Colette Lewiner, head of the French consultancy firm CapGemini, informed that this year, European energy firms have sold over €60 billion of assets just to pay off their hefty debts.