© Reuters. FILE PHOTO: A logo on the Aston Martin DBX at the Aston Martin Lagonda factory in Barry, Wales, Britain February 21, 2020. REUTERS/Rebecca Naden/Pool/File Photo
PARIS (Reuters) – French state-controlled power group EDF (PA:)’s shares slumped on Friday after France ordered EDF to sell more of its cheap nuclear power to smaller competitors to limit the increase of electricity prices in the country.
EDF said this measure could cost it up to 8.4 billion euros ($9.64 billion). EDF also dropped its earnings guidance and lowered its nuclear production forecast after technical problems forced it to extend the outage of a fifth nuclear reactor.
EDF shares were down 23.7% in early session trading, and JP Morgan analysts said EDF may need to raise capital to make up for the hit to its earnings.
“We believe that a capital increase is indeed likely at this stage to make up for the material EBITDA decline it will face in 2022,” wrote JP Morgan.
($1 = 0.8712 euros)
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