French utility firm Electricit├® de France (EDF) has announced a provisional timetable for the sale of its UK electricity distribution networks.
EDF wants the sale to be launched in early December, and will seek first-round bids from the middle of January. Binding bids are to be finalised by the end of the first quarter in 2010.
The networks, which EDF first announced it was selling six weeks ago, could fetch up to £4 billion, according to estimates.
On offer are three power networks that serve 20 million people, or eight million homes, in London and the east and south-east of EnglandÔÇöareas which account for 40 per cent of the UKÔÇÖs GDP.
The networks comprise 47,000 kilometres of overhead wires along with 135,000 kilometres of underground cables. They cost EDF £530 million to maintain last year.
EDF, which is 80 per cent owned by the French government, has made a commitment to reduce its debt by £4.5 billion by the end of next year, from £21 billion at the end of 2008.
The company took on debts of £12.5 billion after buying British Energy last year as part of its strategy to build new nuclear plants in the UK.
The distribution networks are attracting interest from infrastructure funds, as well as investors keen to work with companies that have experience in the sector.
Two firms from Canada are reportedly seeking to get involvedÔÇöCanada Pension Plan is looking to join a consortium, while Toronto-based Borealis Infrastructure is teaming up with Scottish & Southern Energy.
Funds from Macquarie, 3i and IFM Infrastructure are also said to have expressed an interest, while the UKÔÇÖs National Grid is also preparing a bid.
Infrastructure funds from RREEF, Alinda, GIP and Blackstone are also said to be considering participating.
Starting the sale process next month will give potential bidders some idea on the medium-term profit potential of the networks, because UK energy regulator Ofgem is due to set allowed returns for operators before that time.
This makes the investment attractive for potential bidders as the fixed return guarantees steady profits.
In 2008, EDFÔÇÖs profit before tax was ┬ú189 million.
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