Bloomberg News

EDF Tumbles to Record Low on Overcharging Ruling: Paris Mover

November 29, 2012

Electricite de France tumbled to a record low in Paris after the country’s highest court, the Conseil D’Etat, ruled that the company overcharged households.

The shares fell as must as 6.2 percent, the biggest decline since July 20. They were 3.4 percent lower at 13.79 euros as of 9:48 a.m., their lowest level since the stock began trading in November, 2005. About 1.6 million shares changing hands in the first 30 minutes of trading, more than its average daily volume in the last three months of 1.4 million.

EDF shares were the biggest decliners on the benchmark CAC 40 Index (CAC), which rose as much as 0.8 percent. The company’s 30- day volatility, a measure of stock swings, increased to 27.5 today, the highest since Aug. 31.

EDF has overcharged households by a total by 8.8 billion euros ($11.4 billion) since 2009, said Sipperec, the body that filed the complaint against EDF.

“The amount of 8.8 billion represents a big dent in the group’s financial capacity and an adverse effect on cash flows,” Citigroup analyst Sofia Savvantidou said in a note.

EDF’s distribution unit ERDF said it has no knowledge about a possible repayment to customers. It said it is up to the energy regulator to decide on how it wants to apply the ruling.

Studying Response

French Energy Minister Delphine Batho said the government is studying its response. EDF spokeswoman Carole Trivi declined to provide immediate comment.

The Conseil d’Etat cancelled the rate charged by ERDF to consumers between 2009 and 2013 following a complaint by the Sipperec group of Paris region municipalities.

French electricity customers should be reimbursed 1.9 billion euros for each of four years that the group said ERDF overcharged, according to a statement from Sipperec.

To contact the reporters on this story: Vidya Root in Paris at vroot@bloomberg.net; Tara Patel in Paris at tpatel2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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