FRANKFURT/DUESSELDORF (Reuters) - German energy utility RWE’s (RWEG.DE) local municipal shareholders have approved its plan to suspend payment of a dividend, despite their objections to Chief Executive Peter Terium’s move, which he said was necessary to conserve cash as it battles the industry crisis.
Last month the group’s municipal shareholders, which together own about 24 percent of the company, had heavily criticised management for the surprise announcement of the first suspension of payouts since the 1950s, saying they would seek to reverse the decision.
But on Thursday RWE said that the move been agreed unanimously by its supervisory board, suggesting the local shareholders, which hold four of the board’s 20 seats, also voted in favour.
“Not endorsing the board will not change the fact that we won’t get a dividend,” Manfred Busch, treasurer of the city of Bochum, which is among RWE’s shareholders, told Reuters.
The approval is a victory for Terium, who RWE said will become the chief executive of the new retail, renewables and networks unit that is to be listed later this year, a job that will give him control over the group’s remaining growth businesses.
Germany’s second largest utility said in December it would pool these healthy business units into a new entity and list about 10 percent of it in an initial public offering scheduled for late 2016, leaving behind the troubled fossil-fuelled and nuclear electricity generating business.
RWE AG will own the remaining 90 percent.
Dutchman Terium, 52, will assume responsibility for the new entity on April 1 and continues to serve as CEO of RWE AG until the IPO, the group said, confirming an earlier report by Reuters.
RWE Chief Financial Officer Bernhard Guenther will also move to the new unit in the same capacity and will be replaced by Markus Krebber, the finance chief of RWE’s energy trading unit.
“We have a lot of work to do before the new subsidiary will be listed on the stock market,” Terium said in a statement.
“My top priority during this period as CEO of both companies will be to shape the separation process that is necessary for the IPO in a responsible manner,” he added.
Following the IPO, deputy CEO and Chief Operating Officer Rolf Martin Schmitz will become the CEO of RWE AG, which will also retain the energy trading unit as well as the thermal power plants.
(This version of the story refiles to add shareholder’s comment, more details on reshuffle; refiles to add dropped word ‘had’ in third paragraph)
Editing by Greg Mahlich