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Germany's E.ON and RWE to foot nuclear waste bill in one hit - CEOs
January 2, 2017 / 4:05 AM / 9 months ago

Germany's E.ON and RWE to foot nuclear waste bill in one hit - CEOs

A fuel station for e-cars of German power supplier RWE, one of Europe's biggest electricity and gas companies is pictured in Berlin, March 14, 2016. REUTERS/Wolfgang Rattay

BERLIN/FRANKFURT (Reuters) - German power utilities E.ON (EONGn.DE) and RWE (RWEG.DE) are able to cover their contributions to the country’s nuclear waste storage costs in one lump-sum payment, the chief executives of both groups were quoted as saying on Monday.

RWE, E.ON, EnBW (EBKG.DE) and Vattenfall [VATN.UL] agreed with the government in October to start contributing this year to a 23.6 billion euro ($24.7 billion) fund in exchange for shifting liability for nuclear waste storage to the state, giving investors greater clarity over the companies’ future finances.

Under the deal, E.ON and RWE must pay about 10 billion euros and 6.8 billion respectively.

The companies had been pushing for favourable terms of payment and the October deal allows them to transfer the funds at one stroke by mid-2017 or in several more costly instalments over the next decade.

“We don’t need to draw on the possibility of payment by instalments,” RWE Chief Executive Rolf Martin Schmitz said in an interview with Die Welt, adding that RWE was “well positioned” after raising billions in a stock listing of a minority holding in energy group Innogy (IGY.DE).

The remarks chime with those from E.ON CEO Johannes Teyssen, who told newspaper Rheinische Post that the group had enough financial flexibility to avoid paying in several steps.

Shares in RWE were the top gainers among German blue-chips, up 3 percent by 1049 GMT, while E.ON shares rose 1.6 percent.

Teyssen said that E.ON needed to raise cash, either through a share sale, hybrid issues or convertible bonds on shares of Uniper (UN01.DE) -- the power plant and energy trading unit it spun off in September -- to come up with the money.

Asked whether he was concerned that E.ON, shares of which have fallen more than 13 percent over the past year, could eventually be acquired, Teyssen said: “No, E.ON is not a takeover candidate.”

Teyssen said that he was in regular talks with potential investors interested in buying shares in E.ON, adding that activist shareholder Cevian -- recently reported to be interested in buying a significant stake in the business -- was not among them.

Reporting by Andreas Cremer and Christoph Steitz; Editing by Robin Pomeroy and David Goodman

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