By Gwénaëlle Barzic, Matthieu Protard and Gilles Guillaume
PARIS (Reuters) - The national lottery, Paris's main airport operator and several other firms deemed not strategic could kick off a wave of French privatizations this autumn, banking sources with knowledge of the plans said.
The French finance ministry last month announced plans to sell 10 billion euros ($11.8 billion) worth of stakes in state-owned companies in order to raise money for a new fund to finance innovation, an election pledge of President Emmanuel Macron.
Banking sources told Reuters the first privatizations are likely to be launched between the end of this month and early October but will not include the defense, aerospace and nuclear industries. This would exclude companies like Thales (PA:TCFP), Safran (PA:SAF), Airbus (PA:AIR) and EDF (PA:EDF).
French national lottery company Française des Jeux (FDJ) is likely to be high on the list for a partial privatization.
It is 72 percent state owned and investment banks have proposed several scenarios, including selling a stake to a content operator or another European lottery company.
With 26 million players and turnover of 14.3 billion euros last year, FDJ is Europe's second-biggest lottery after Italy's Lottomatica. FDJ declined to comment.
"Investment banks have pitched a lot of proposals, but nothing has been decided," one of the sources said.
Sources say the government could also reduce its 23.05 percent stake in telecoms group Orange (PA:ORAN) relatively quickly.
The state's 50.63 percent stake in airport operator ADP (PA:ADP), which runs the Charles de Gaulle and Orly airports in Paris, is also expected to be on the block, and several potential buyers - including ADP minority shareholder Vinci (PA:SGEF) - have already publicly expressed an interest.
Publicly owned financial institution la Caisse des Dépôts, which is relatively independent from the French government, expressed an interest in ADP last month and has already worked in tandem with Vinci on the Lyon airport.
Before it can sell down its stake in ADP further, the government would have to push through a legal change allowing it to let the state's share in ADP fall below 50 percent. It will have to do the same for gas utility Engie, (PA:ENGIE) in which it is required to hold one third under current legislation that dates back to the company's privatization.
A government source said that STMicroelectronics (PA:STM) will not be on the sales list as micro chips are considered a strategic industry while a pact with the Italian state, which is a co-shareholder, also would complicate a deal.
For now state holding company APE has not launched any formal sales procedures or mandated any investment banks, banking sources say.
Besides outright sales, the state could try more original approaches, like for Air France-KLM (PA:AIRF). Late last month the government agreed to let Delta Air Lines (N:DAL) and China Eastern (SS:600115) take minority stakes in the carrier, which means the state's share will be diluted to 14 from 17.6 percent.
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