ESSEN, Germany – Activist shareholder Enkraft on Tuesday said RWE would have to divest its brown coal division to fully transform and decarbonise its business, adding the company was too hesitant in mapping out such a step.
RWE earlier reported final results for 2021, which showed a 25% increase in both adjusted net profit as well as generation from brown coal, or lignite, which is among the most CO2 intense energy sources.
“Given the significantly elevated price of electricity RWE’s very solid 2021 results come expected,” Enkraft said, adding a separation from lignite was “the only way for RWE to become green in the foreseeable future”.
Enkraft, which says it owns a big enough stake in RWE to request motions be put on the agenda of RWE’s annual general meetings, has in the past called on the company to divest its brown coal assets to raise value.
“Similar as in the past, RWE management appears hesitant commit to any strategic initiative that proactively would position the company in the fast-changing industry environment,” the investor said.
Asked about Enkraft’s demands on Tuesday, RWE’s finance chief Michael Mueller said that while there was agreement on both sides that RWE’s value should be higher and that the coal exit should be handled effectively, views differ over how this can be achieved.
RWE has previously said a quick divestment of lignite could not be done overnight, a view also shared by its municipal investors, who together represent RWE’s biggest shareholder.
(Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by Kirsten Donovan)
