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 Electricité de France S.A.,
In our capacity as Statutory Auditors of Electricité de France S.A. (the “Company”), we hereby report to you on regulated agreements.
The terms of our engagement require us to communicate to you, on the basis of 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 notified of the following agreement which was previously authorized by your Board of Directors.
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: in the context of the issue through a public offering governed by Article L. 411-2, 1° of the French Monetary and Financial Code (Code monétaire et financier) (so-called “by private placement”), of “Green Bonds” convertible into new shares and/or exchangeable for existing shares (the “Green OCEANEBonds”), of a nominal amount of €2.4 billion, the French State placed an order in the order book, through Agence des participations de l’Etat, to subscribe for 40% of the issue.
The Green OCEANE Bonds subscribed by the French State, in the same way as all the Green OCEANE Bonds, are subject to the stipulations of the Green OCEANE Bonds subscription contract (the “Subscription Contract”), with payment/delivery on 14 September 2020, that is:
- the nominal value of the Green OCEANE Bonds was set at €10.93, corresponding to a premium of 32.5% above the Company's reference share price(1) on the EuronextParis regulated market;
- the Green OCEANE Bonds do not bear interest (zero-coupon) and were issued at an issue price of €11.70, i.e. 107.00% of their nominal value, resulting in a negative annual gross yield-to-maturity of -1.68%;
- previously converted, exchanged, redeemed or repurchased and cancelled, the Green OCEANE Bonds will be redeemed at par on maturity on 14 September 2024;
- the conversion/exchange ratio is set at one share per Green OCEANE Bond, subject to standard adjustments, including anti-dilution adjustments and dividend protections.
Meeting on 7 September 2020, your Board of Directors authorized this issue and, as necessary, the conclusion by the Company of the corresponding Subscription Contract, considering that the subscription by the French State was in the Company’s interests and enabled the completion of the Green OCEANE Bond issue under the best market conditions.
On 8 September 2020, the French State subscribed to the Issue in the nominal amount of €959,999,995.71, representing 40% of the Issue.
(1) The reference share price is equal to the volume-weighted average price of the EDF share on Euronext Paris from the launch of the issue on 8 September 2020 to the setting of the definitive terms (pricing) of the Green OCEANE Bonds the same day, i.e. €8.2465.
