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Categorized | Banks

French state bank CDC plans run of sales

Posted on September 25, 2016

French utility Veolia©Bloomberg

French utility Veolia

The Caisse des Dépôts, France’s state-backed bank, is planning to sell hundreds of millions of euros worth of shares in some of the country’s largest companies as it shifts its focus away from large historical shareholdings.

Pierre-René Lemas, who was previously the chief of staff to President Francois Hollande before taking over as head of the CDC in 2014, told the Financial Times that it made “no sense” for the group to keep many of its positions.

    “Many of our companies are there for historical reasons. We have to reduce the number of companies we own, and that is what we are doing,” he said in an interview from his Paris office.

    The CDC, created in 1816 in the wake of the Napoleonic wars, holds about €30bn worth of stakes in groups such as the waste and water company Veolia, the transport company Transdev and the construction company Egis.

    It also has an eclectic set of holdings in smaller companies such as Compagnie des Alpes, which owns ski-lifts around France and the Parc Astérix theme park. It also owns a stake in Belambra clubs, which owns holiday homes in France.

    “We have around 16 subsidiaries. We are in the process of looking at what we will sell and what we will keep,” he said, adding that some targets had already been identified.

    The CDC last week raised €456m through the sale of about 4 per cent of the capital of in Veolia. The bank is also considering selling all or a part of its stake in motorway operator Sanef, majority owned by Spain’s Abertis, according to people close to the situation.

    The shift in strategy away from owning larger groups comes amid a wider debate in France about the role of the government in French business after a string of failures in the state-controlled nuclear industry this year.

    Mr Lemas said he wanted the CDC, which is a quasi-government body managed by parliament, to add to the economy in ways beyond simply being a shareholder in large companies. The sale of stakes in large companies could yield hundreds of millions of euros that could be used elsewhere in France, he added.

    “The CDC should be focused on supporting the French economy, promoting the energy transition towards renewables and helping with social housing in France,” he said. “That is where we can be the most helpful.”

    The group has €225bn worth of regulated savings deposits collected by French banks and is a major financier of the French economy via a group called BPI France, which invests in small and mid-sized groups.