The Strategist

French EDF stocks crash after reports of defective components in nuclear reactors

09/11/2019 - 03:32

Investors reacted extremely negatively to a message from Framatome, a subsidiary of Electricite De France, about some "deviations" in the welds of already manufactured and delivered components for nuclear power plants, as well as in new products of the enterprise.

On Tuesday, September 10, Framatome announced start of “additional research” regarding the identified deviations in the welds of the steam generators produced.

EDF confirmed that the company was informed of deviations from the technical standards for the manufacture of components of nuclear reactors. As noted, violations were committed in the production of "equipment in operation and new equipment that is not yet in operation."

Against this backdrop, EDF shares on the Euronext Paris stock exchange fell by 6.8% to EDF €10.115 per share. For EDF quotes, this is the minimum level since February 2018.

British Barclays experts said that EDF problems could lead to higher electricity prices in France and Central Europe in the future in case of failure or the need to repair nuclear power plant reactors with faulty equipment.