* French industry minister eyes EDF, GDF Suez stake sales
* Finance minister plays down possible stake sales
* Sale could raise 4.2 billion euros
* Funds could be invested in other industries -govt source
By Geert De Clercq and Jean-Baptiste Vey
PARIS, April 15 (Reuters) - The French government could raise as much as 4.2 billion euros ($5.50 billion) by trimming its stakes in utilities EDF and GDF Suez, money it may invest in other industries to help invigorate the ailing economy.
Without naming either company, French industry minister Arnaud Montebourg on Sunday raised the possibility of reducing the state shareholding in electricity utility EDF to 75 percent from 84.4 percent, and the stake in gas utility GDF Suez to 33 percent from 36.7 percent.
“We are in the process of looking at what would be possible,” a senior government source said.
The source added that the objective would not be to fill holes in state coffers but to invest in new industries.
In March, France raised nearly half a billion euros from the sale of a 3.12 percent stake in aerospace group Safran with a view to inject the funds into small businesses. The sale left the state with 27 percent in the firm.
Countries across Europe, including Italy and France, are sitting on billions of dollars worth of assets, which could be used to limit unpopular spending cuts or to invest in other areas of their flagging economies.
France owns around 55 billion euros’ worth of stakes in listed companies, but socialist French President Francois Hollande has made little mention of asset sales.
This is the second time Montebourg, one of the most left-wing ministers in the government and viewed by some as a loose cannon, has spoken about partial privatisations without a swift government denial.
Finance minister Pierre Moscovici, interviewed on state radio earlier, did not mention the possible stake sales, but a source close to him said there was no particular plan to sell, adding that only the finance ministry has the authority over any disposals.
“If the state considers some assets are not strategic and could be sold to finance other investments that would be beneficial to the economy, there is nothing to stop us from doing that,” the source said.
A 10 percent stake in EDF, at current prices, would raise about 3 billion euros, while a 3 percent stake in GDF Suez would raise about 1.2 billion euros.
At midday, EDF was down 0.2 percent and GDF Suez was up 0.3 percent, outperforming a weaker CAC40 index.
While Europe’s bourses are at their highest levels since early 2009, utilities have been among the worst performers.
Power demand is falling because of the economic crisis and the drive for more energy efficiency, utilities are carrying billions of debt following a wave of consolidation, and the boom in renewable energy is damaging their business model.
“This may not be a good time to sell, but frankly, because of regulation and falling consumption, there is not much good news in the pipeline for the sector,” said Colette Lewiner, head of utilities at French consultancy firm CapGemini.
$1 = 0.7635 euros Additional reporting by Benjamin Mallet and Catherine Bremer; Writing by Geert De Clercq; Editing by Louise Heavens