On 8 September 2020, EDF made an issuance of Green Bonds convertible into new shares and/or exchangeable for existing shares (OCEANEs Vertes) with the nominal amount of €2,400 million and an issue value of €2,569 million (see note 2.4.1 to the 2020 EDF financial statements).
In accordance with the terms of the OCEANE bonds, a consequence of the Simplified Tender Offer initiated by the French government (see note 2.2.9) was that if the offer was declared compliant by the AMF, the opening of the Offer would lead to temporary adjustment of the EDF share allocation ratio for conversion of the bonds during the defined Tender Offer Adjustment Period.
The bondholders were thus formally notified on 23 November 2022 that the new share allocation ratio (NRAA - nouveau ratio d’attribution d’actions) would be 1.289 EDF shares for one OCEANE bond from 24 November 2022.
At 31 December 2022, 882,340 OCEANE bonds had been converted into new shares (during the period 24 November -31 December 2022), giving rise to creation of 1,137,336 shares.
These operations increased the share capital by €0.57 million since exchange for new shares was the only option. They generated a bond/share conversion premium of €9.08 million (see note 22.1).
For information, the French government acquired 127,147,355 bonds (OCEANEs) through this Simplified Tender Offer, with the result that it held 214,979,011 OCEANE bonds or 98.30% of the total portfolio of OCEANEs at 31 December 2022.
On 8 February 2023, the AMF published the result of the French government’s simplified tender offer for the equity securities of EDF, after the offer closed on 3 February 2023 (see notes 2.2.9 and 22.1). Consequently, in accordance with paragraph 2.6.3 (public offerings) of the terms of the offer, the share allocation ratio adjustment period in the event of a tender offer will expire on 1 March 2023, i.e. 15 business days after the AMF’s publication of the result of the Offer. After the adjustment period in the event of a tender offer, the share allocation ratio will be adjusted to 1.124 shares per OCEANE bond, the same as the share allocation ratio that applied before the adjustment period in the event of a tender offer. Due to the French government’s undertakings pending the Paris Court of Appeal ruling on the action seeking annulment of the AMF’s approval of the Offer, if the Court confirms the AMF’s approval and the Offer is reopened, the share allocation ratio will be adjusted again, to 1.289 shares per OCEANE bond, respecting a new adjustment period in the event of a tender offer, on terms that will be announced by EDF.
Perpetual subordinated bonds issued by EDF in Euros and other currencies are recorded in compliance with the French Chartered accountants’ body Ordre des experts comptables opinion 28 of July 1994, taking their specific characteristics into consideration.
As a result, they are classified as additional equity, since redemption is exclusively controlled by EDF.
Issuance expenses and issue premiums on perpetual subordinated bonds are recognised in deferred charges in the balance sheet and amortised over the duration of the relevant tranche, on a pro rata basis.
The annual interest expense on these bonds is recorded as a financial expense in the income statement.
These perpetual subordinated bonds are reclassified from Additional equity to Financial liabilities when the intent to exercise a redemption option in the short term is announced.
Additional equity at 31 December 2022 amounts to a net €11,972 million and consists of:
This net amount includes the effects of foreign currency variations, redemption premiums and the related amortisation.
Payments to bearers of perpetual subordinated bonds amounted to €569 million in 2022 (€578 million in 2021). This expense is recorded in “Expenses on long-term financial liabilities after hedging”.
On 29 January 2023 EDF exercised its option to redeem all the perpetual subordinated bonds issued in January 2013, totalling USD 2,098 million. EDF consequently reclassified an amount of €1,966 million from Additional equity to Financial liabilities at 31 December 2022, considering the redemption as certain (see note 2.2.7 and note 31 (4)).
