March 8, 2016 / 7:45 AM / 2 years ago

RWE takes axe to British unit npower after 'disaster'

ESSEN, Germany (Reuters) - Germany’s RWE (RWEG.DE) will cut more than a fifth of staff at British unit npower, but has no plans at the moment to divest the struggling subsidiary, which has swung to a loss and is bleeding customers to rivals.

“A sale is currently not on the agenda,” RWE Chief Operating Officer Rolf Martin Schmitz told journalists on Tuesday after unveiling a 137 million euro ($151 million) operating loss at npower for last year, compared with a 227 million profit in 2014.

Npower is one of the big six energy providers in Britain, RWE’s second-largest market by customers after Germany. It will shed 2,400 out of 11,500 jobs, a number that includes temporary workers.

Npower directly employs 6,668 staff and RWE could not say how many of these would be affected, only that it would be less than half of the planned cuts.

A man enters an npower facility in Solihull, Britain March 7, 2016. REUTERS/Darren Staples

Problems at the unit emerged last year, when RWE warned of a rapid loss of customers as well as billing issues that effectively prevented it from charging clients. RWE replaced top npower management last August.

In 2015 npower lost 351,000 customers, or more than 6 percent of its gas and power clients in Britain. Billing issues would lead to additional burdens in 2016, RWE said.

    “What happened there was a disaster,” RWE Chief Executive Peter Terium said. “We hope to be out of the valley of tears in the UK by 2018.”

    Shares in RWE were down 1.5 percent by 1131 GMT. The stock has shed more than half of its value over the past year, pressured by factors including uncertainty over the cost of shutting down of its nuclear plants.

    Additional reporting by Vera Eckert; Editing by Mark Trevelyan

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