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Innogy to exit British retail JV with SSE in long term - CEO

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Innogy to exit British retail JV with SSE in long term - CEO

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DUESSELDORF, Germany (Reuters) – German energy group Innogy <IGY.DE> will at some point pull out of the planned British retail supply joint venture with peer SSE <SSE.L>, its chief executive said. Last week, the two groups announced plans to merge and list their British retail units to better compete with smaller rivals and reap badly-need synergies in a market with razor-thin margins. Innogy will hold a 34.4 percent stake in the combined entity, with SSE to own the rest, but Innogy Chief Executive Peter Terium said this structure would not last forever. “No, we will not hold on to it in the long-term,” Terium told journalists late on Tuesday, adding this did not mean that the company would sell its stake soon. Innogy has committed to holding its stake for at least six months from admission of the joint venture, which would combine Innogy’s struggling British unit npower with SSE’s British retail supply business. The deal is expected to be completed by the first quarter of 2019 at the latest. Terium said Innogy could sell its remaining stake if there is a good offer, but added the group did not need the cash in the short term and could focus on maximising the entity’s value in a first step. “This can well take several years, we are in no rush,” he said, adding that Innogy would not completely withdraw from Britain, which remains a key market for wind farms, as does the United States, where Republicans have proposed wind support cuts. Terium said that despite this the group remained committed to the United States wind market, where it plans to invest a triple-digit million euro amount, possibly more. “We will certainly show further growth there,” Terium said, confirming plans for a first U.S. wind project in 2018. Terium said he regretted the decision of supervisory board Chairman Werner Brandt to step down from his post, adding that collaboration had been excellent. He did say that Brandt’s reasons for the move were personal, seeking to allay possible concerns that there was a conflict of interest due to Brandt’s post of supervisory board chairman at Innogy’s parent RWE <RWEG.DE>. “There are no business reasons that affect Innogy or RWE,” Terium said, also trying to prevent speculation about a possible offer for RWE’s 76.8-percent stake in Innogy, which sources said has caught the eye of peers including Engie <ENGIE.PA>, Iberdola <IBE.MC> and Enel <ENEI.ML>.

(Reporting by Tom Kaeckenhoff; Writing by Christoph Steitz; Editing by Georgina Prodhan and David Evans)
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