RWE will fight for Dutch nuclear stake

Thursday, June 4, 2009

LONDON (Reuters) - German RWE, Europe's fifth-largest utility, will fight to take over Essent's stake in the Netherland's only nuclear power plant, disputing a claim by peer Delta that it should sell it on.

RWE does not have to comply with a demand by Dutch state-owned utility Delta to sell on the 50 percent stake of the Borssele nuclear power plant it is buying as part of its 8.2 billion euro ($11.6 billion) takeover of Essent, RWE finance director Rolf Pohlig said in an interview.

"We are not in discussions to give up Essent's stake in Borssele, we want to keep it, it's part of Essent and we are making an offer for Essent as a whole," Pohlig told Reuters.

After RWE managed to clinch the takeover of Dutch utility Essent, the next stumbling block came along with Delta claiming RWE was not allowed to buy Essent's 50 percent stake in the plant in Borssele as part of the takeover.

The statutes governing the partnership between Essent and Delta stipulate it cannot be sold to a listed company.

"We do not agree with having a partner in Borssele who is in private hands," a spokeswoman for Delta said.

"They should either offer the shares to us or they can look for another shareholder, such as the government, but not a private company like RWE," she said.

But Essent and RWE say they have come up with a construction in which RWE will become the economic owner of the stake, while Essent's public shareholders will still have legal ownership.

"With that the public interest and the public influence will be preserved," said Jeroen Brouwers, a spokesman for Essent.

Nuclear power plants are the most profitable large scale power plants once construction costs have been paid for and are part of RWE's program to expand and replace its fleet of power stations.

RWE said on Thursday it remained confident of completing the takeover of Essent in the third quarter after antitrust regulators from the European Union postponed the deadline for their review of the takeover by two weeks to June 23.

Building new nuclear power plants is the most long-term element of RWE's strategy.

The company aims to start producing power with new nuclear power stations in Britain in the second half of this decade, and is still looking for a partner for its 49 percent stake in the Belene nuclear power plant in Bulgaria, Pohlig said.

Peer Vattenfall had put plans on hold to get involved in building nuclear power plants in Britain due to the global downturn, its chief executive, Lars Josefsson, told Reuters on Monday. Utility stocks have been faring worse than other stocks this year as they sell most of their products years before they are actually consumed, so a crisis as well as a recovery can have a delayed impact.

The DJ Stoxx utilities index has declined 9 percent so far this year, the second-worst performing in sector on the DJ Stoxx index

RWE would not sell shares in its renewable energy business RWE Innogy in the current environment, but it remains an option for the future, Pohlig said.

Pohlig reiterated RWE expectations for profit in 2009, saying recurrent net income, operating profit and earnings before interest, taxes, depreciation and amortization will be on the level of 2008

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