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RWE investor ENKRAFT slams lack of focus on brown coal asset sale

RWE investor ENKRAFT slams lack of focus on brown coal asset sale
RWE investor ENKRAFT slams lack of focus on brown coal asset sale Copyright Thomson Reuters 2022
Copyright Thomson Reuters 2022
By Reuters
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FRANKFURT - Activist investor ENKRAFT slammed RWE on Thursday for not pursuing a sale of its brown coal division aggressively enough after the German utility's chief executive said such a move should not be rammed through by brute force.

ENKRAFT argues that a sale of RWE's brown coal, or lignite, mining and power business could double the value of Germany's largest electricity producer, which is also one of Europe's biggest developers of wind energy projects.

"RWE's management is failing to take important initial steps to pave the way for a separation of RWE's non-core lignite business," ENKRAFT Managing Director Benedikt Kormaier said.

"The lacking sense of urgency of management around the most important strategic and financial topic of RWE is frightening," he said in a statement in response.

RWE Chief Executive Markus Krebber told Reuters this week that an early exit from lignite required a massive expansion of renewables and solutions to ensure the security of energy supplies, as well as to help affected employees.

"That is our path. And that's also how the valuation uplift will come about, just perhaps a little later," he said when asked about ENKRAFT's view that a sale could boost RWE's value.

Lignite, which is the most polluting form of coal when it comes to carbon emissions, accounted for 8.5 gigawatts, or more than a fifth, of RWE's generation capacity at the end of 2020 and the company has three opencast lignite mines.

ENKRAFT last year disclosed a stake of more than 500,000 shares in RWE which gives it the right to request items be put on the agenda for the company's next annual general meeting, which is scheduled for April 28.

Shares in RWE were up 2.1% on Thursday after German monthly manager magazin reported that ENKRAFT was considering putting items on the agenda, including proposing the replacement of supervisory board members.

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