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E.ON's Uniper may sell stake in gas field, pipelines: sources
July 29, 2016 / 12:11 PM / a year ago

E.ON's Uniper may sell stake in gas field, pipelines: sources

A shareholder of E.ON SE Climate and Renewables picks up a brochure of E.ON's utility sector Uniper SE at the annual general shareholders meeting of E.ON during which the shareholders are asked to approve the split-off of Uniper SE from E.ON in Essen, Germany, June 8, 2016.Wolfgang Rattay

FRANKFURT (Reuters) - Uniper, the power plant and energy trading unit owned by German utility E.ON (EONGn.DE), might put up for sale its stakes in a Russian gas field as well as regional gas pipelines to raise much-needed funds, three people familiar with the matter said.

Uniper, to be spun off from E.ON in September, earlier this year announced plans to sell assets worth at least 2 billion euros ($2.22 billion) by 2018, but declined to be more specific except saying it would not sell a whole division.

Chief Executive Klaus Schaefer did single out Uniper's 12.25 percent stake in Brazil's Eneva (ENEV3.SA), but at a current value of 234 million reais ($71.17 million), it would not be substantial in reaching the targeted disposal sum.

The group is therefore expected to take a hard look at its 25 percent stake in Yuzhno Russkoye - a gas field it co-owns with Gazprom (GAZP.MM) and BASF (BASFn.DE), the sources said. Estimates value the stake at $1.7-$2.5 billion.

Likely disposals also include the group's stakes in gas pipelines OPAL, BBL and Transitgas, the sources said, which Bernstein analysts have valued at a combined 920 million euros.

"No matter what they end up deciding to sell, it'll be some of their crown jewels," one of the people said, adding Uniper's board had yet to make a formal decision on the assets it plans to divest.

A spokesman for Uniper declined to comment, saying nothing had been decided.

E.ON decided to spin off a majority of Uniper following years of falling wholesale prices that turned the operation of conventional power plants into a loss-making business, fuelling investor concerns over the unit's prospects.

As a result, Uniper, which made a net loss in each of the last three years, needs to raise cash in an effort to strengthen its balance sheet and keep its BBB- rating, just one notch above junk.

The sources also pointed to Uniper's run-of-the-river hydroelectric power plants in Germany, with a capacity of 838 megawatts, as potential targets, saying they were among the group's most valuable assets.

Uniper is also expected to watch closely the planned sale of gas storage assets by DEA Deutsche Erdoel AG [RWEDE.UL] -- run by Citi -- for an expected enterprise value of up to 300 million euros before deciding whether it will make a similar move.

Citi declined to comment. DEA was not immediately available for comment.

Additional reporting by Tom Kaeckenhoff in Duesseldorf and Vera Eckert in Frankfurt, editing by David Evans

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