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UPDATE 1-France values EDF minorities buyout at nearly $12 billion -sources

(Adds background, details)

PARIS, April 6 (Reuters) - France’s government has said it expects to spend around 10 billion euros ($11.87 billion) to buy out minority shareholders in EDF as part of a proposed restructuring of the power group, two union sources told Reuters.

This restructuring, currently under discussion between Paris and the European Commission, would entail the creation of a holding company, EDF SA, that would be fully state-owned whereas the French government’s ownership of EDF is at present 83.7%

“We are told the state will invest 10 billion euros to buy back the shares held by minority shareholders in order for EDF SA to become 100% state-owned”, Sebastien Menesplier, executive of the CGT union told Reuters.

Unions representing workers at EDF, included the CGT, on Tuesday had talks with French Finance Minister Bruno Le Maire, and other ministers, to discuss the proposed restructuring, which is codenamed “Project Hercules.”

A second union source, who spoke on condition of anonymity, told Reuters the 10 billion-euro figure was given by Le Maire at Tuesday’s meeting.

EDF and the finance ministry declined to comment when contacted by Reuters.

The projected cost of buying out the minority shareholders has not previously been disclosed. Based on EDF’s current share price, acquiring 16% of shares would cost around 6 billion euros, so the 10 billion euro figure represents a significant premium.

Project Hercules was conceived by the French government as a way to secure the future of the company’s debt-laden and capital-hungry nuclear arm, while allowing more lucrative parts of the business to flourish free from the broader group’s liabilities.

The plan is to nationalise a holding company which will include the nuclear assets. A separate entity, controlled by the holding company, will be created to house the more lucrative businesses.

Investors would be invited to acquire up to 30% of the shares in that entity under the plan, allowing the state to recoup some of its 10 billion-euro outlay. ($1 = 0.8425 euros) (Writing by Benoit Van Overstraeten and Christian Lowe;)

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