This is a free translation into English of the Statutory Auditors’ special report on regulated agreements that is issued in the French language and is provided solely for the convenience of English speaking readers. This report on regulated agreements should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France. It should be understood that the agreements reported on are only those provided by the French Commercial Code and that the report does not apply to those related party transactions described in IAS 24 or other equivalent accounting standards.
To the Shareholders’ Meeting of Électricité de France SA,
In our capacity as Statutory Auditors of Électricité de France SA (the “Company”), we hereby report to you on regulated agreements.
The terms of our engagement require us to communicate to you, based on information provided to us, the principal terms and conditions of those agreements brought to our attention or which we may have discovered during the course of our audit, without expressing an opinion on their usefulness and appropriateness or identifying such other agreements, if any. It is your responsibility, pursuant to Article R. 225-31 of the French Commercial Code (Code de Commerce), to assess the interest involved in respect of the conclusion of these agreements for the purpose of approving them.
Our role is also to provide you with the information stipulated in Article R. 225-31 of the French Commercial Code relating to the implementation during the past year of agreements previously approved by the Shareholders’ Meeting, if any.
We conducted the procedures we deemed necessary in accordance with the professional guidelines of the French National Institute of Statutory Auditors (Compagnie Nationale des Commissaires aux Comptes) relating to this engagement. These procedures consisted in agreeing the information provided to us with the relevant source documents.
Pursuant to Article L. 225-40 of the French Commercial Code, we have been advised of the following agreements which were previously authorized by your Board ofDirectors.
1. Agreement for the sale of EDF shares previously held by the French State to EDF which will be subsequently resold to beneficiaries of the employee reserved share offering
Persons concerned: the French State, represented by Mr Martin Vial on the Board of Directors, a shareholder owning more than 10% of the voting rights of EDF.
Nature, purpose and terms & conditions: as part of the offer reserved for eligible EDF group employees resulting from the sale of preferential subscription rights by the French State during the EDF share capital increase in 2017, the agreement provided that the number of EDF shares sold by the French State should be equal to the lower of:
a) the number of EDF shares requested by the beneficiaries;
b) the number of shares to be offered under Article 31-2 of Order 2014-948 of 20 August 2014, as amended by Law 2015-990 of 6 August 2015, i.e. 7,704,974 shares.
The agreement also provided that the agreed price would be identical to the reference price under the offer, i.e. the volume-weighted average price over the last 20 trading days prior to the decision determining the withdrawal period dates in connection with the offering.
On 4 April 2019, your Board of Directors authorized the execution of the agreement signed on 24 June 2019, considering that it was in EDF’s interest to control the process of allocating EDF shares to the offering’s beneficiaries and to not be exposed to any volume or price risk, considering the terms of the sale agreement.
On 10 July 2019, EDF purchased 7,704,974 EDF shares from the French State at a unit price of €12.26 per share, i.e. the maximum number of shares, in order to resell them immediately to the offering’s beneficiaries.
2. Implementation of the sale agreement between EDF, AREVA SA and AREVA NP for the acquisition of 75.5% of NEW NP’s (now called Framatome) capital.
Persons concerned: the French State, represented by Mr Martin Vial on the Board of Directors, a shareholder owning more than 10% of the voting rights of EDF and AREVA SA, and Mr Maurice Gourdault-Montagne (until 28 June 2019), Director of EDF and AREVA SA.
Nature, purpose and terms & conditions: following the memorandum of understanding signed on 28 July 2016, the Board of Directors, which met on 15 November 2016, had previously authorized the agreement, signed the same day, setting the terms of the sale of the interest conferring to EDF exclusive control of an entity (“NEWNP which has become Framatome”), 100%-held by AREVA NP, a subsidiary of AREVA SA, regrouping the activities relating to the design and manufacturing of nuclear reactors and equipment, fuel assemblies and services to the nuclear installed base within the Group.
The final acquisition agreement covering 75.5% of the capital of Framatome was authorized by your Board of Directors on 14 December 2017 and signed on 22 December 2017. The acquisition was carried out on 31 December 2017 for €1,868 million, excluding acquisition costs.
In 2019, the following two agreements were entered into with regard to price adjustments and/or earn-outs as provided for under the acquisition agreement:
