June 5, 2012 / 5:26 PM / 6 years ago

E.ON waste-burning unit sale delayed again-sources

* Remondis teamed up with MVV to make bid - sources

* Deadline moved to June 25 - source

* E.ON, MVV decline to comment

FRANKFURT, June 5 (Reuters) - German utility E.ON’s plans to sell its waste-burning unit Energy from Waste are being further delayed and the deadline for binding bids has been extended beyond June 8, three people familiar with the matter said on Tuesday.

One of the sources said the new deadline for binding bids could be closer to June 25.

The deadline, initially set for the end of May, had been postponed to June 8, sources said last month, after overcapacity in the market for waste burning plants reduced bidder interest.

On Tuesday, two sources said that Germany-based water and environmental service company Remondis had teamed up with German utility MVV to bid for the unit, while Singapore’s Sembcorp has said it was also looking at the unit.

E.ON and MVV declined to comment. Remondis was not immediately available for comment.

The sale of Energy from Waste is part of E.ON’s 15 billion euro disposal program to streamline its activities as the group struggles to cope with Germany’s decision to shut down all nuclear plants by 2022.

Last month, sources said that bids for the unit would unlikely top 800 million euros to 1 billion euros and that four potential buyers were expected to make binding bids, with Morgan Stanley Infrastructure and Swedish private equity group EQT seen as front runners.

E.ON has hired Barclays and Royal Bank of Scotland to manage the sale process.

E.ON Energy from Waste generated revenue of 544 million euros in 2011. It has 18 waste incinerators in Europe, most in Germany, with an annual capacity of about 4.0 million tonnes.

But the market is experiencing overcapacity after Germany encouraged construction of incinerators in the 1990s to reduce the use of landfills.

These plants now compete for shrinking amounts of waste as recycling increases. Incineration companies must pay more for the refuse they use as fuel while power prices are falling. In Germany less than 1 percent of electricity comes from waste. (Reporting by Arno Schuetze, Christoph Steitz and Edward Taylor)

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