The local mixed-economy company relies on a precise capital structure balance: local authorities and their groupings hold between an absolute majority and a ceiling set by the general code of local authorities, while private shareholders complete the board. This distribution is not a statutory detail. It conditions governance, investment capacity, and the degree of public control over missions ranging from urban planning to the management of local public services.
Financial Risk Profile of SEMs: When Unapproved Activities Compensate for the Deficit
Institutional profiles present the SEM as a safe vehicle, backed by public power. The balance sheet reality is more nuanced. Since 2022, the approved activity of social housing carried out by certain SEMs has been in deficit. It is the unapproved, more commercial activities that compensate and support the overall result.
This internal compensation mechanism alters the risk profile of the structure. A SEM whose result depends on commercial operations to balance its public service missions no longer has the same market relationship as a traditional public operator. For private shareholders, this means exposure to increased operational risk. For the majority shareholder community, this imposes heightened vigilance on the profitability of free operations.
We observe that this duality is not always documented in the annual reports submitted to the boards of directors. Analytical tracking by activity segment remains a recurring weak point, whereas it should constitute a priority management tool.
To deepen the operation of the mixed-economy company, it is therefore necessary to go beyond purely legal reading and integrate this dimension of cross-financial management between approved and unapproved activities.
Governance of the Local SEM: The Blind Spots of Public Control
The SEML takes the legal form of a public limited company. Its organization must comply with common company law as defined in the commercial code, with a minimum of seven partners. The board of directors or supervisory board constitutes the central management body.
The local authority, as the majority shareholder, theoretically has a decisive control lever. In practice, the frequent absence of periodic performance evaluation mechanisms weakens this control.
The 2026 report from the Territorial Chamber of Accounts of New Caledonia on Sodil illustrates this problem: the company owes its survival solely to the financial support of the Islands province, without any systematic evaluation of financial and socio-economic results concerning the public funds invested being implemented.
Recommendations from the Territorial Chamber of Accounts
The Chamber recommends several structural corrections:
- A review of the economic model to verify medium-term viability without recurring subsidies
- A revision of the statutes to confine the corporate purpose to the actual competencies of the community
- A stricter framework for provincial funding with performance indicators
- The establishment of a conflict of interest prevention guide, planned by 2027
These recommendations do not concern an isolated case. They point to a structural flaw in many SEMs: the confusion between legitimate public support and financial infusion without measurable counterpart.
Share Capital and Private Shareholding: Calibrating the Board
The calibration of a SEM’s share capital is not a trivial accounting exercise. It determines borrowing capacity, credibility with banking partners, and the operational maneuvering room of the manager.
Local authorities and their groupings must hold more than half of the capital and votes in the deliberative bodies. This rule guarantees the predominance of the general interest. Private shareholders (banks, construction companies, service operators) provide sector expertise and market discipline in return.
The main risk lies in undercapitalization. An optimistic business plan at the time of establishment can lead to subsequent capital calls that private shareholders refuse to follow, leaving the community alone facing recapitalization. Preliminary feasibility studies (strategic analysis, cash flow plans, financing plans) are not mere administrative formalities: they condition the survival of the structure.
Financial Assistance Beyond Capital
The CGCT regulates the financial assistance of local authorities to their SEMs. Beyond subscribing to the capital, the community can grant current account advances, loan guarantees, or balance subsidies. Each of these mechanisms carries a distinct budgetary risk for the community.
We recommend formalizing a financial intervention doctrine before the creation of the SEM, not afterward. A community that enters the capital without having defined its additional commitment ceilings exposes itself to a difficult-to-control cascading effect.
SEM, SPL, SEMOP: Choosing the Right Mixed Economy Structure
The local SEM is no longer the only mixed economy vehicle available to local authorities. The local public company (SPL) and the single-operation mixed economy company (SEMOP) offer alternatives with distinct legal characteristics.
The SPL is 100% owned by local authorities and is exempt from competitive bidding obligations for in-house contracts. The SEMOP, created for a specific operation, associates a community with an economic operator selected after competitive bidding, with a lifespan limited to that of the operation.
- The SEM is suitable for long-term multi-purpose missions (development, real estate, management of multiple services) where the contribution of private capital is structuring
- The SPL is appropriate when the community wants total control without private shareholding, particularly for integrated services
- The SEMOP meets a specific and identified need, with a private partner chosen through a call for tenders and simplified governance
The choice between these three forms does not depend on political preference but on a legal and economic analysis: nature of the mission, expected duration, need for private capital, submission to competition law.
The legal regime of SEMLs, codified in Articles L.1521-1 to L.1525-3 of the CGCT and stemming from the law of July 7, 1983, has undergone several adaptations, notably by the law of January 2, 2002 aimed at modernizing their status. Each legislative evolution has strengthened transparency and control requirements, making regulatory compliance more demanding for SEM leaders.
The sustainability of a SEM relies less on its legal status than on the rigor of its financial governance and the clarity of its corporate purpose. The structures that survive are those that regularly assess the relevance of their economic model in light of the public funds mobilized.