French utility EDF’s (EDF.PA) Finance Director Thomas Piquemal has resigned over the company’s plan to build nuclear reactors in Britain, a source familiar with the situation said on Sunday.
The source said Piquemal concluded that EDF’s 18 billion pound (23.3 billion euro) Hinkley Point project to build two Areva-designed (AREVA.PA) European Pressurized Reactors (EPRs) would put too much stress on EDF’s already stretched balance sheet.
The source confirmed a Bloomberg report that said Piquemal had resigned because pushing ahead now with the project to build the 1,650-megawatt nuclear reactors – among the biggest in the world – would jeopardise EDF’s financial situation.
Two other sources familiar with the situation said EDF’s board had not yet formally been informed of Piquemal’s resignation. One said the board is set to meet on Tuesday.
An EDF spokesman declined to comment.
Sources told Reuters last month that EDF’s unions, which have six seats on the board, would vote against the project, as it stands right now and want EDF to delay it until the company has developed a simplified version of the EPR it plans to build in Britain.
Two EPRs under construction in France and Finland are years behind schedule and billions of euros over budget.
When the project was first announced in October 2013, EDF, which is 85 percent state-owned, was set to take a minority stake in the project. Chinese investors and Areva itself took a combined stake of more than 50 percent, which meant EDF would not have to consolidate the debt related to the project.
But since then, Areva has been bailed out by the French government and its reactor unit will be taken over by EDF, while EDF’s Chinese partner, CGN, said in October 2015 it would take a stake of only one-third, leaving EDF to shoulder two-thirds of the financing.
A 55 percent slide in EDF’s stock in the past year has reduced the firm’s market value to just 22.8 billion euros, less than the Hinkley Project budget, and its net debt has risen to 37.4 billion euros at the end of 2015. The utility has had to borrow billions of euros every year just to pay its dividend.
A fall in wholesale electricity prices to new decade lows early this year and the acquisition of Areva’s reactor unit will weigh on the finances of EDF. It also needs to spend some 50 billion euros to upgrade its ageing French nuclear plants in the next decade and 5 billion euros on the rollout of smart meters.
Chief Executive Officer Jean-Bernard Levy said last month he expected EDF to make a final investment decision on Hinkley Point “this year,” after having said several times in recent months the decision would be taken “soon.”
Following a meeting in France last week, British Prime Minister David Cameron and French President Francois Hollande said in a joint statement that the Hinkley Point project was a “pillar in the two countries’ bilateral relationship” and a key element of UK energy policy.
(1 euro = 0.7730 pounds)