EDF shareholders approve 4 bln euro capital increase

(Adds CEO comments)

PARIS, July 26 (Reuters) - Shareholders of France's EDF (Hanover: E2F.HA - news) approved on Tuesday a planned 4 billion euro ($4.4 billion) capital increase ahead of the state-controlled utility's decision on whether to proceed with its Hinkley Point UK nuclear project on Thursday.

EDF (Paris: FR0010242511 - news) announced the capital increase in April, when the government said the French state would subscribe to 3 billion euros of the increase as part of a financing package under which the state would also take its dividend in shares instead of cash on 2016 and 2017 earnings.

The company will issue new shares before closing its 2016 financial accounts in February 2017. The timing will depend on market conditions.

"We need to boost our equity as market conditions are tough and we need to maintain the quality of our debt and our credit rating," EDF chief executive Jean-Bernard Levy told an extraordinary general shareholders meeting.

He said the firm had major financing needs related to the 18 billion pound ($23.63 billion) Hinkley Point project, the upgrade of its ageing French nuclear plants and its Linky smart meters programme, but he added the capital issue proceeds would not be allocated to one project specifically.

The company said earlier this year that the capital increase will be completed by about 10 billion euros worth of asset sales by 2020 - including a stake in grid unit RTE - and a one billion euro reduction of costs by 2019 compared to 2015.

Levy said that EDF's planned takeover of the reactor division of nuclear group Areva (LSE: 0P4A.L - news) had been slowed down by the complexity of the legal structure required to make sure EDF is not exposed to any legal risks related to the takeover.

Areva and its Finnish customer TVO are claiming billions of euros from one another over a the long-delayed Olkiluoto 3 reactor project.

Levy said there were intense talks about the Areva takeover and that he expected these would be concluded soon.

In EDF's first comments about a raid by French stock market regulator AMF on EDF's offices last week, Levy said that the AM's investigation was not related to EDF's financial situation but to its financial communication since July 2013.

French daily Le Monde reported last week the AMF was examining financial communications concerning the utility's nuclear reactor renovation programme as well as its Hinkley Point project. ($1 = 0.9087 euros) ($1 = 0.7617 pounds) (Reporting by Geert De Clercq and Benjamin Mallet; Editing by Mark Potter and Alexandra Hudson)