Debt-wracked France sells stake in defence group Safran

[PARIS] Cash-strapped France, desperate to cut its budget deficit in line with EU rules, said Tuesday it was selling part of its stake in defence group Safran for 1.0 billion euros.

Paris offloaded 16.5 million shares in the group, representing 3.96 percent of the firm's capital, the economy and finance ministries said in a statement.

The state remains the group's largest shareholder, with an 18.03 per cent stake.

Economy Minister Emmanuel Macron announced in October that the state - which currently holds stakes in 74 companies to the tune of around 110 billion euros (US$123 billion) - would seek to sell between five and 10 billion euros of these assets in the coming 18 months.

Four billion euros will be used to pay down France's debt, the rest for "reinvestment".

Last month, the European Union set France tough new targets to get its budget deficit back within Brussels rules stipulating that EU countries must keep their budget deficits below three percent of output.

France has until June 10 to detail the measures it will take to achieve the targets set by the European Commission.

For 2015, the Commission, the EU's executive arm, estimated the savings required at 0.5 per cent of GDP, up from the current 0.3 per cent - that means additional savings worth at least 4.0 billion euros.

Safran is a global aerospace and defence manufacturer that employs nearly 70,000 people worldwide.

AFP