He is a small shareholder who does not let go of EDF. For several months he has been in charge of the financial communication of the public company as part of its nationalization. He only owns 50,000 shares but he is not just anyone. Fabien Choné led the small alternative operator Direct Energie for more than ten years. He was the only real competitor exciting EDF in the private market. Fabien Choné sent several letters to the Autorité des marchés financiers (AMF) in which he believes that the communication of EDF’s results at the beginning of 2022 does not reflect reality. He judges that it blackens the books to weigh on the market price of the company’s shares and ultimately leads to “distorting” the state’s takeover bid.
At that time, two important events were coming up. In the first place, the corrosion problems in the reactors had been detected, without, however, the company being able to measure the economic consequences. So, the nationalization of EDF was inevitable, although not yet announced before the presidential elections. In this context, EDF gave a “pessimistic and therefore misleading vision of the company’s future results”, estimates the former head of Direct Energie, which caused a fall in the stock price.
Explanations. On January 13, 2022, the electrician reveals to the markets the financial impact of the exceptional measures decided by the government. EDF will have to sell more cheap nuclear electricity to its competitors. This amount increases by 20% (20 TWh) and will cost 8,000 million euros, causing a 14% drop in the stock market. In this invoice there is also a deficit of 4.5 billion euros because EDF should have sold this more expensive electricity. At that time, market prices reached 257 euros per megawatt hour while the government forced it to sell it at 42 euros to its competitors.
glass half empty
But at the same time, they explain the various letters sent to the AMF, and of which BFM Business has obtained copies, EDF does not fully disclose the unexpected effect related to the increase in electricity prices. The group must pass them on to its clients’ invoices, in accordance with the law. Although, in reality, it will be painless for the consumer, since “absorbed” by the tariff shield put in place by the State.
“EDF presented a deficit […] while it did not present the unexpected effect”, due to the rise in prices, explains Fabien Choné. He estimates it at 15 billion euros while the group only puts it at 6 billion euros in January 2022 and then at 8.7 billion euros in July 2022. For him, financial communication is not complete and EDF was content to present the glass half empty.
The former head of Direct Energie sends this letter at a key moment. The next day, the Financial Markets Authority must rule on the validity of the nationalization of EDF. He will finally give the green light two weeks later.
Bercy and EDF minimize
These letters made noise in EDF and Bercy. The State Participation Agency replied on November 14, 2022, explaining that what it calls the “unexpected effect” of the rise in electricity prices “exists and has been communicated to the markets” but specifies that it was 9,000 million euros, as EDF assured BFM Business. They deny Fabien Choné’s estimate of 15,000 million euros.
Table of calculations in support, the interested party does not move in its three letters. And accuse EDF of weighing on its share price just before its nationalization. “Then it appears that the takeover bid launched by the French State, insofar as the proposed price is deduced to a large extent from the recent stock prices corresponding to this period [début 2022, ndlr]is clearly distorted”, he writes to the AMF. Discussion of figures and financial communication? At the end of October EDF forecast a deficit of 16,000 million euros for 2022. At the end of December, when closing the annual accounts, the decrease in margins ultimately only amounted to 5 billion euros, a spectacular recovery in just two months while prices have changed little.
Source: BFM TV
