JPMC Utilities Daily — 27 October: ENGI, Spanish Utilities, IBE x2, SVT

This J.P. Morgan European Utilities & Clean Energy daily covers ENGIE, Spanish Utilities, Iberdrola (two items) and Severn Trent. Bloomberg reported, citing De Tijd and L'Echo, that Belgian Prime Minister Bart de Wever is considering a forced nationalisation of ENGIE's Belgian nuclear plants as negotiations have reached an impasse ahead of the Nov. 4 deadline, with legal texts prepared for an involuntary nationalisation under which Belgium would unilaterally set compensation and ENGIE could appeal. JPMC view: the headline is bad news for the equity story and implies a long period of legal challenges, but fundamentally a meaningful impact is hard to see, as these assets contribute close to zero to the SOTP given low EBIT from remaining plants, and the liabilities should only risk a reduction if there is a life extension;