Bloomberg News

RWE Said Close to Sale of German Grid to Commerzbank-Led Group

July 08, 2011

July 8 (Bloomberg) -- RWE AG is close to an agreement to sell its Amprion German power grid company to a group of investors led by Commerzbank AG, as the country’s second-largest utility cuts debt, said a person with knowledge of the matter.

The utility may reach a deal with the bank’s Commerzreal unit as early as next week, said the person, who asked to remain anonymous because the matter is private and didn’t give a value for the transaction. The real estate division of Germany’s second-biggest lender will sell stakes in the network to investors from the insurance industry, the person said.

Annett Urbaczka, a spokeswoman for Essen-based RWE, declined to comment as did Commerzreal spokesman Markus Esser. RWE has said that it could partner with financial investors on the asset to share investment costs.

The utility could sell as much as 75 percent of the unit, which had sales of 6.4 billion euros ($5.7 billion) in 2010, a person familiar with the matter said in February.

RWE is battling a probable slump in earnings as the German government implements a tax on the country’s nuclear power plants to help plug the deficit. Rules guaranteeing rates for power line operators have lured pension plans, insurers and banks to seek the stable returns of grid assets in Europe.

The German utility joins competitors EON AG and Vattenfall AB in selling electricity lines to reduce debt and satisfy European Union regulators who want to split power generation from transmission on antitrust concerns.

Amprion, which operates 11,000 kilometers (6,840miles) of ultra-high-voltage power lines in western and southern Germany, had equity of 613 million euros, the company said on Feb 24. RWE also owns lower-voltage grids in the country.

--Editors: Will Kennedy, Amanda Jordan

To contact the reporter on this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net

To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net; Frank Connelly at fconnelly@bloomberg.net


Race, Class, and the Future of Ferguson
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus