• BNP, Societe Generale also said to work on capital increase
  • Power company seeks to raise funds by end of 2016 fiscal year

Electricite de France SA has chosen four banks to manage its 4 billion euro ($4.4 billion) capital increase as the French power company seeks to boost its balance sheet to weather a drop in European power prices, people familiar with the matter said.

JPMorgan Chase & Co., HSBC Holdings Plc, Societe Generale SA and BNP Paribas SA are working on the fundraising plans, the people said, asking not to be named because the talks are private.

EDF, one of the biggest power companies in Europe, has said it would propose the measure to its board by the time it closes its accounts for this year. The utility also said it would sell about 10 billion euros of assets by 2020 to help finance new projects. EDF is raising money as it works to absorb lower electricity prices and a milder winter that damped demand. The firm is preparing to make a final decision on whether to build two nuclear reactors in the U.K. with a Chinese partner, a project that’s estimated to cost 18 billion pounds.

Representatives for EDF, JPMorgan and BNP declined to comment. Representatives for HSBC didn’t have an immediate comment, and Societe Generale didn’t immediately respond to a request for comment.

The U.K.’s vote to leave the European Union won’t affect EDF’s strategy in the country, Chief Executive Officer Jean-Bernard Levy told reporters in Paris Friday. Speculation has mounted over the future of the project in southwest England since EDF’s finance chief quit in March after expressing concern that the investment would put the utility under too much financial strain, people familiar with the matter said at the time. EDF announced the plans to strengthen its balance sheet in April.

The French government, which owns 85 percent of EDF, has said it will subscribe 3 billion euros to the capital increase. The government has also agreed to receive its dividend in EDF shares for the next two years to alleviate the burden on EDF’s cash flow.

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