Post on 31-Dec-2015
description
JLG - May 2005
The State acting as an Owner :The French Reforms
Jean-Louis GIRODOLLE
Vice-Director
French Government Shareholding Agency
2JLG - May 2005 2
Synopsis
Introduction
A dedicated entity : The French Government Shareholding Agency (« Agence des Participations de l’Etat »)
A clear owernship policy, aimed at modernizing and transforming SOEs
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Synopsis
Introduction
A dedicated entity : The French Government Shareholding Agency (« Agence des Participations de l’Etat »)
A clear owernship policy, aimed at modernizing and transforming SOEs
1
2
4JLG - May 2005 4
Introduction (1/2):The French State : a significant
and active shareholder
A sizeable portfolio
50 significant groups or entities controlled
Market value of listed companies portfolio €45bn ; 10 stakes have a value above €1 bn
Total consolidated assets of companies controlled by the APE amount to €530bn, to be compared with €950bn total assets of the 33 industrial companies of the CAC 40
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Introduction (2/2):The French State : a significant
and active shareholder
A leading actor on the European privatization market Disposals by the State : IPOs, secondary offerings, trade
sales,…Since 1993, over €60bn, over 5% of GDP23% of total State disposals in Europe
Corporate transactions : rights issues, over 500 non core asset disposals
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Synopsis
Introduction
A dedicated entity : The French Government Shareholding Agency (« Agence des Participations de l’Etat »)
A clear owernship policy, aimed at modernizing and transforming SOEs
1
2
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A dedicated Agency (1/4)
Background : Fast changing context for SOEs : globalization,
deregulation
Major corporate governance failures : Credit Lyonnais, France Tel, EDF
Process : 2002 : report by a group of businessmen, Governement
decision to establish a dedicated Agency within the Treasury
2003 : implementation : Start-up approach in building the project
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A dedicated Agency (2/4)
A mix between government culture and the model of private holdings : Task force under the authority of the Minister for Economy
& Finance
Self-management budget (€9m) within the Treasury framework
Increased human resources
Mixed culture of skills
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A dedicated Agency (3/4)
A clear leadership within the State : Agency established as sole shareholder of French major SOEs : Governance : coordinates SOE board members activity,
votes at general shareholders meetings,…
Financials : audit committee, dividend policy,…
Strategic operations : M&A, restructuring, privatizations
No interference with other State functions : Regulators
The State as a client (procurements, concessions,…)
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A dedicated Agency (4/4)
Increased transparency and public information:
Annual report to public and Parliament
Informations about Agency activity available on Ministry of Finance website (www.minefi.gouv.fr) and soon on a dedicated website (www.ape.minefi.gouv.fr)
Consolidated financial statements established for the first time in 2004 (for fiscal year 2003)
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Synopsis
Introduction
A dedicated entity : The French Government Shareholding Agency (« Agence des Participations de l’Etat »)
A clear owernship policy, aimed at modernizing and transforming SOEs
1
2
12JLG - May 2005 12
A clear ownership policy (1/5)
Implementation of best corporate government practices in SOEs (“code of good practices” between Agency and SOEs):
Boards fully enpowered
Committees
Independant auditors
Professionalized State representatives
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A clear ownership policy (2/5)
Promotion of transparency in SOEs :
Clear relations with the State, based on contracts
Greater financial transparency : international accounting standards (IFRS) financial communication
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A clear ownership policy (3/5)
Active role of Agency as a shareholder : Enhanced relations with top management
Annual strategic dialogue
Regular reporting
Agency systematically represented in audit and strategic/investment committees
Close scrutiny on major investment/disposal projects
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A clear ownership policy (4/5)
Promotion of a modernized corporate culture and framework of SOEs : Promotion of high quality management, shareholder
value orientation and international culture in line with the international practice
= a major change with the traditional approach of some SOEs with an engineer culture more oriented towards technological perfection than financial performance
Change of the by-laws of some SOEs (from State entities to companies : DCN/military shipyards, EDF, GDF, ADP, Postal Bank)
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A clear ownership policy (5/5)
Increasing and capturing shareholder’s value : Focus on operational performance and efficiency
Industrial partnerships in order to create value : Air France-KLM, Renault-Nissan, integration of Wanadoo and Orange into France Telecom, Sagem-Snecma,…
Privatization considered not only as a cash generating process but also as an opportunity for the development of solid companies
State financial support (recaps) when rational, under the control of the European Commission
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Conclusion :Agenda 2005-2006
Utilities : EDF (electricity), GDF (gas)
Paris airports : Aéroports de Paris (ADP)
Future Postal Bank
Railways : SNCF (freight activity restructuring, non core assets disposals)
…….
JLG - May 2005
The State acting as an Owner :The French Reforms
Jean-Louis GIRODOLLE
Vice-Director
French Government Shareholding Agency