German power giant RWE to spin off renewables business
RWE, Germany's second-biggest power supplier, said Tuesday it planned to spin off its renewables, grids and retail operations at home and abroad to a new subsidiary and list it on the stock market.
The aim was to "create a platform for growth with its own access to the capital market. This will strengthen the viability of the group as a whole. The new subsidiary will be listed on the stock market probably in late 2016," RWE said in a statement.
The move was "in response to the transformation of the European energy landscape," said chief executive Peter Terium.
Germany's power suppliers have been hit in recent years by the government's decision to phase out nuclear by the next decade and promote renewable energies over traditional fossil fuels such as coal.
"We are creating two viable companies under one roof. The new subsidiary will have its own access to the capital market and improve our growth prospects," the CEO explained.
"At the same time, we are convinced that conventional power generation will remain an irreplaceable partner for renewable energy for decades to come. Our conventional power stations are the backup for renewables."
RWE's bigger rival, E.ON, is also splitting its conventional and renewable energy activities into separate entities.
RWE said it planned to offer some 10 percent of the new unit's share capital to the public.
"At the same or later point in time additional stakes may be disposed. The proceeds will be used to finance further growth in markets with good future prospects," the statement said.
"RWE will remain the new company's majority shareholder over the long term and consolidate it fully. The parent company will focus on conventional power generation and energy trading," it added.
© 2015 AFP