The French government has sold a 4.5 percent stake in gas utility Engie, kicking off an asset sale drive that aims to redeploy scarce cash from non-strategic, mature industries to an innovation fund.
Banking sources told Reuters last month that the national lottery, Paris’s main airport operator, Engie and several other firms deemed non-strategic would be part of a wave of French privatizations starting this month.
Despite strained public finances, the proceeds will go to a new €10 billion ($12 billion) fund to finance innovative projects, one of President Emmanuel Macron’s election pledges.
The government is struggling to meet a European Union deficit limit of three percent of economic output this year, a level it has exceeded for the past decade.
The Finance Ministry said it had raised €1.53 billion ($1.82 billion) with the sale of its Engie stake, putting it well on the road to its 10 billion-euro target for the fund.
Macron, a 39-year-old former economy minister and ex-investment banker, has said he wants to redirect state funds to invest in innovative startup companies.
Bankers say airport operator Aeroports de Paris, in which the state holds 50.63 percent, is high on the list of assets that could be sold. Minority shareholder Vinci has already publicly expressed interest as a possible buyer.
ADP’s shares were trading down close to 2 percent in early trading on Wednesday in what one Paris-based analyst said was anticipation that more stock could come on the market at a slight discount, as is usually the case in big share placements.
At €147 a share, ADP’s stock is still close to Friday’s all-time high of 151 euros, making it a tempting candidate for sale by the state.
Engie shares opened lower on Wednesday after the stake sale, but recovered as investors took heart at the fact that they were placed at a smaller discount than January’s stake sale, said analyst Pierre-Antoine Chazal at brokerage Bryan Garnier.
In January, the shares were sold at a 4.4 percent discount to the market price at the time when concerns about the firm’s transformation plans weighed, but they were sold at a discount of 1.2 percent to Tuesday’s market price, he said.
“The market sentiment has moved on considerably and the share has recovered. There’s enough demand to absorb the small discount,” Chazal said.
Engie shares hit an all-time low in February, with most energy stocks still reeling from the slump in oil prices and overcapacity in Europe’s power production. Despite a recovery, it is trading at less than a third of its 2008 all-time high.
Overall, market conditions are broadly favorable for the state to reduce its corporate holdings. Shares on France’s SBF-120 index were just 6 percent off May’s decade highs.
Banking sources told Reuters last month the stake sales would not include the defense, aerospace and nuclear industries. This excludes companies like Thales, Safran, Airbus and EDF.

Source: Arab News