E.ON seeks to reduce widening losses

21 March 2017

German power company E.ON has raised about €1.35bn ($1.45bn) through a share offering to help to reduce debt and pay for nuclear waste storage, Bloomberg reported on 16 March. E.ON sold 200.1m shares, increasing its total shares by about 10%.

EON and Germany’s three other nuclear power plant operators (RWE, EnBW and Vattenfall) agreed in 2016, after more than a year of talks with the national government, to pay €23.6bn to store nuclear waste. The proceeds of EON’s offering will help to close a €2bn gap between what it has already set aside for clean-up after Germany phases out nuclear power by 2022 and what it owes as a one-time payment.

EON said it plans to shrink its net debt by about 24% to €20bn, and may allow investors to receive dividends as shares instead of cash and sell non-strategic assets. Its net loss for 2016 widened by 21% to a record €8.45bn, the company said.

E.ON has introduced a plan to cut costs by €400m a year, resulting in 1300 job cuts, of which 1000 will be in its German home market. E.ON reported earnings before interest and taxes of €3.1bn in 2016, with adjusted net income of €904m. The company said its results were impaired by the spin-off of Uniper and the agreement with the German government on funding for the phase-out of nuclear energy. 

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