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. (“EDF”), 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, as well as the reasons justifying that such agreements are in the Company’s interest, 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 agreements concluded during the year which were previously authorized by your Board of Directors.
Persons concerned: the French State, represented by Mr. Martin Vial on the Board of Directors (at the time of authorization by the Board of Directors), a shareholder owning more than 10% of the voting rights of EDF.
Nature, purpose and terms & conditions: as mentioned in the first paragraph of the second part of this report, a settlement agreement relating to the compensation payable by the French State to EDF in connection with the early closure of the Fessenheim nuclear power plant (the “Settlement Agreement”) was signed on September 27, 2019.
At the request of the French State, the decision was made to add certain modifications, by way of an amendment signed on July 25, 2022, to the Settlement Agreement in order to specify the practical terms and conditions of its application and provide better budget predictability for the French State without challenging the principles and balance defined by the Settlement Agreement.
On December 15, 2021, your Board of Directors authorized the signing of this amendment to the Settlement Agreement, considering that it was in EDF’s interest to sign it since the modifications to the Settlement Agreement were negotiated by EDF in its best interests and did not challenge the clauses already approved in the Agreement.
Person concerned: Jean-Bernard Levy, Chairman and CEO of EDF (until November 23, 2022) and non-voting member on the Société Générale Board of Directors.
Nature, purpose and terms & conditions: as part of the share capital increase performed on April 7, 2022, with retention of shareholder preferential subscription rights, in the gross amount (including the issue premium) of €3.2 billion, an underwriting agreement (the “Underwriting Agreement”) was concluded on March 17, 2022 between the Company and a banking syndicate comprising BNP Paribas, Barclays Bank Ireland PLC, Crédit Agricole Corporate and Investment Bank, Goldman Sachs Bank Europe SE, Natixis and Société Générale as joint global coordinators and bookrunners (the “Global Coordinators”) and Banco Santander, S.A., BofA Securities Europe S.A., J.P. Morgan SE and Morgan Stanley Europe SE as joint bookrunners (together the “Underwriters”).
Pursuant to the Underwriting Agreement, the Underwriters have pledged jointly but not severally, subject to the fulfillment of the French State’s commitment to subscribe to the share capital increase for its share of the capital (the “Subscription Commitment”), to obtain subscription, or otherwise subscribe, to all new shares issued by EDF, except for those covered by the Subscription Commitment.
In consideration for the Underwriters’ pledge, EDF has pledged to pay an underwriting fee to each Underwriter equal to a percentage of the gross share capital increase amount (less the amount covered by the Subscription Commitment) underwritten by each of them. Furthermore, EDF could also pay the Underwriters in a discretionary manner an additional fee (representing 0.6% of the gross share capital increase amount less the amount covered by the Subscription Commitment), regarding both its amount and allocation.
Pursuant to the Underwriting Agreement, fees paid by EDF to Société Générale totaled €1,274,682.
On March 17, 2022, your Board of Directors previously authorized the signing of the Underwriting Agreement, considering that it was in EDF’s interest to enter into said agreement since it had to be arranged to complete the share capital increase.
On February 10, 2022, EDF and General Electric Company (GE) signed a MOU for the planned acquisition by EDF of GE’s Steam Power nuclear activities (“GE Steam Power”) (excluding service activities conducted in America).
