By Christoph Steitz and Tom Käckenhoff
FRANKFURT – Activist investor Enkraft is demanding a shareholder vote to force RWE to prepare a spin-off of its brown coal unit at the utility’s annual general meeting (AGM) next month, according to a filing made public on Tuesday.
Enkraft, which owns a stake in RWE that is large enough to request items be put on the AGM’s agenda, has for months lobbied for such a move, and while there is general consensus about the necessity to phase out coal, both sides differ over strategy.
RWE said it has added Enkraft’s motion to the AGM’s agenda.
“On several occasions Enkraft has tried to persuade the company’s Executive Board to immediately leverage this potential,” Enkraft said in the motion that was made public on RWE’s website.
“The persistent inactivity of the board is no longer justifiable and is unacceptable.”
RWE said it would soon publish its response to Enkraft’s request.
According to the filing, Enkraft is asking management to “prepare draft agreements or plans corresponding reports for the lawful spin-off” of RWE’s subsidiary RWE Power AG, which includes the utility’s brown coal activities.
RWE’s next AGM is scheduled for April 28.
If approved, the documents should then be submitted at the latest by the next ordinary AGM – which would take place in 2023 – for “adoption of a resolution,” the filing said.
Enkraft reckons that spinning off lignite generation would remove a discount on RWE shares that puts it behind pure play renewables firms, adding such a move could add more than 16 billion euros ($17.6 billion) to the firm’s market value.
RWE has said that phasing out coal cannot be done via brute force, adding the impact on jobs and regional economies had to be taken into account and proposing a smoother and less abrupt exit.
($1 = 0.9092 euros)
(Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by Miranda Murray, Susan Fenton and Jane Merriman)
