ADP shares down as French court allows referendum on privatization

An Aeroports de Paris logo hangs on the wall inside Charles de Gaulle airport, operated by Aeroports de Paris, in Roissy
An Aeroports de Paris logo hangs on the wall inside Charles de Gaulle airport, operated by Aeroports de Paris, in Roissy, France, April 11, 2019. REUTERS/Benoit Tessier

May 9, 2019

PARIS (Reuters) – Shares in ADP – the operator of Paris’ Charles de Gaulle and Orly airports – were down nearly six percent after the French constitutional court approved a potential referendum on the government’s plans to sell shares in the company.

The government wants to sell part of the state’s 50.6 percent stake in ADP, but is facing broad opposition against the plan. A group of opposition parliamentarians wants to call a referendum to block the sale.

“The proposed referendum … is in line with the constitution,” the council said in a statement.

The proposal is the first attempt to use a procedure allowed under a 2008 revision of the French constitution, which allows referendums under certain conditions.

Organizers need to win the backing of a fifth of the members of parliament, get the Constitutional Council’s green light and then get obtain signatures of 4.7 million voters – a tenth of the electorate – over the internet over a nine-month period.

Political analysts say it would be difficult but not impossible to get that many signatures to block the sale.

As part of planned measures to placate the “yellow vest” protest movement against his policies, President Emmanuel Macron is considering easing the requirements for calling a referendum in a constitutional reform scheduled for this summer.

The proposal for a referendum on ADP was launched in April by 248 socialist, conservative, far-left and other MPs and senators who argue that a further privatization of ADP would reduce state dividend income, limit government influence on strategy and risk impacting passenger comfort.

France’s centrist government, which has referred to the referendum as “political tactics”, wants to sell state assets in order to finance a 10 billion euro innovation fund as well as to pay of state debt.

It also wants to sell stakes in state lottery FDJ (Française des Jeux) and gas and power group Engie.

(Reporting by Elizabeth Pineau avec Myriam Rivet; Writing by Geert De Clercq; Editing by Richard Lough)

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