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French Utility EDF CFO Resigns Possibly For Disagreement With CEO Over £18 Billion Hinkley Point project

Mar 07, 2016 09:03 AM EST

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Thomas Piquemal, chief financial officer for EDF, the French utility service provider, has been rumored on Sunday resigning over an internal disagreement on developing Hinkley Point project. The £18 billion project in Somerset, southwest England, may appear as the first new nuclear power plant of Britain in decades.   

Piquemal is believed to resign centering short term feasibility of a plan for building 1,650-megawatt nuclear reactors. The Areva-designed European Pressurized Reactors (EPRs) will put too much stress on EDF's already stressed balance sheets, has been rumored to be his point of disagreement, reports Yahoo News.

Piquemal has been unwilling to rush the project amid increasing voice of the company's union representatives over the proposed plant's price tag. EDF's board hasn't yet been informed formally informed on the resignation. However, the board is scheduled to meet on Tuesday, according to a report published in Reuters.

The CFO has met with Jean-Bernard Lévy, EDF chief executive, several times last week to express his concern over making the final investment decision so soon. He has also cautioned the CEO that this may throw the group's entire financial future in jeopardy. Piquemal has also suggested waiting another three years before making the final investment decision, reports Financial Times.

EDF has agreed in October developing the third-generation nuclear reactor design venturing with the one-third stake partner, China General Nuclear Power Corporation, a Chinese state run enterprise. The French utility service provider has announced on Thursday making every effort to reach a final investment decision shortly.

However, EDF's unions possess six seats on the board and are believed to vote against the project seeking for simplified version of the EPR for the proposed project. Two EPRs are going to be constructed in France and Finland with schedule backlog for years and over budgeting for billions of Euros.

EDF's stock has witnessed a 55% slashing which has reduced the firm's market value to around €22.8 billion. The present value is lower than the proposed project budget while net debt for EDF has risen to €37.4 billion at the end of 2015. The power giant has been reported to borrow billions of Euros every year for paying of the dividends.

Wholesale electricity price has been witnessing a decade low which appears as the key reason behind tattering financial position of the power giant. The French enterprise requires some €50 billion to upgrade its age old French nuclear plants in the next decade and €5 billion on the rollout of smart meters.

EDF, the French utility, has been reported to borrow billions of Euros to pay dividends and requires billions of Euros for upgrading its age old nuclear plants. Amid such financial turmoil, the enterprise has been acting promptly to make final decision on £18 billion investment for developing Hinkley Point project. Upon disagreement over the issue with company CEO, CFO has been rumored to resign.

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