EDF shares plunge with markets unimpressed by capital raising scheme
Shares in EDF have plunged more than 10% as investors baulked at its plans to raise four billion euro (£3.1 billion) by selling new shares.
The energy giant, which is 85% owned by the French government, announced the capital raising on Friday in a bid to drive down it debt pile and fund costly projects, including the building of the Hinkley Point nuclear power plant.
The move is part of a wider strategy to shore up its balance sheet by selling 10 billion euros (£7.7 billion) worth of assets by 2020, pay dividends in shares both this year and in 2017, and find one billion euros (£777 million) of operational cost savings.
The French government said it will contribute three billion euro (£2.3 billion) towards the rights issue.
EDF issued a statement on Friday after a board meeting confirming the "significant recapitalisation" of the company, which it said made it possible for EDF to proceed with its strategic investment programme, including Hinkley Point C.
It added, the "announcement underlines EDF's solid commitment to its CAP 2030 strategy including the Hinkley Point C project and has provided it with a solid financial footing notwithstanding the challenges of current market conditions."
EDF now expects to make its final decision about whether to fund Hinkley Point in September.
The power plant would be Britain's first for decades and has been slated to start producing electricity by 2025.
But the project - which the company claims could produce as much as 7% of British electricity and create 25,000 jobs - could miss the target due to multiple delays.