Power ranger: Francois Graux, International Power
4 July 2011
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International Power general counsel Francois Graux is no stranger to the legal challenges of the energy industry. Caroline Butcher reports
Francois Graux might be a relatively new face at International Power, but the general counsel has been working in various guises on the GDF Suez side of the recently merged company for the past eight years.
During that time there has been no shortage of new challenges, with Graux negotiating his way through two high-profile company mergers and grappling with the constantly changing regulatory landscape of the energy industry.
The Belgian lawyer arrived as general counsel at Suez Energy International in Brussels in 2003, having formerly worked as senior legal counsel for Tractebel Asia in Bangkok.
Following the merger of Suez Energy with GDF in 2009, he became general counsel of the combined GDF Suez Energy Europe & International, a position he held until this January.
The current year has brought new merger challenges for Graux, with the combination of GDF Suez and UK-based International Power going live on 3 February.
Since that date, Graux has taken on the role of general counsel and company secretary for the International Power arm of the merged company in London, overseeing a network of 97 in-house lawyers based across North America, Latin America, the Middle East and Australia.
“The merger had a long history and the two companies knew each other very well for some time,” Graux recalls. “We signed agreements during the summer of last year but many approvals were needed. There were regulatory aspects and we needed approval from the shareholders of International Power, which was obtained in November.”
Under the terms of the merger, GDF Suez contributed its international assets to International Power in return for 70 per cent of the company’s shares, creating the largest independent power generation company worldwide.
“While GDF Suez is a 70 per cent shareholder it still has free float on the stock exchange,” Graux says. “So one aspect of my job is to make sure the interests of the minority shareholders are protected. It’s something I need to keep a very close eye on, but it’s not usually a problem because the interests of the minority shareholders tend to be aligned with those of the majority shareholder.”
One of Graux’s first tasks was to get to know a new team of colleagues around International Power’s network, but his day-to-day business has remained a familiar but exciting mix that includes M&A, project finance and greenfield development.
“International power is a very interesting business sector,” he enthuses. “It’s a challenge in that we’re delivering a product and services that are essential to businesses and also important to people and households. These are products that have a great impact on the economy as a whole. And we’re doing it in very different political and geographical environments.”
Graux continues to work closely with GDF Suez general counsel Sandra Lagumina, who oversees a separate, larger legal department of 550 lawyers worldwide.
Her team is in the process of forming GDF Suez’ first formal legal panel, and Graux says International Power will tap into the same panel of firms once they are appointed.
Graux currently appoints external law firms on a project-by-project basis, often using beauty parades, and has a ’privileged relationship’ with Clifford Chance, Linklaters and Shearman & Sterling. He also instructs local firms in different jurisdictions and often looks to external firms for extra support in International Power’s project finance work.
“On the one side we have to select the lenders’ counsel, and often the financing agreements are done in tandem with external law firms, whereas purchase agreements or agreements with contractors we try to do in-house,” he explains.
Graux admits that one of the eternal challenges of the energy sector is constantly ticking boxes for regulators and keeping abreast of changing legislation.
“From a business point of view regulatory is the number one challenge,” he says. “Energy and fuel is a key driver for the economy and growth of a country, but there’s a natural tendency for regulators and the government to try to intervene in these matters.”
Name: Francois Graux
Position: General counsel
Industry:Independent power generation
Reporting to: Chief executive Philip Cox
Number of employees:11,000
UK legal spend (annual):£250,000
Main law firms:Clifford Chance, Linklaters, Shearman & Sterling