German energy giant RWE intends to establish a new subsidiary for transferring its renewable power assets, along with its grids and retail operations in the country.
The initiative is a part of the firm’s restructuring strategy, which backs Germany’s nuclear phase-out commitment.
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RWE will be holding the majority shares for the new entity over a long-term, while divesting 10% of its share capital in an initial public offering in late-2016.
The proposed renewable unit is expected to have a power generation capacity totalling more than 3.5GW and will be focused on the wind sector.
Grid business under the unit will be covering a distribution network that is around 550,000km long.
Retail business under the subsidiary will be serving more than 23 million customers across 12 European markets.
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By GlobalDataThe new unit is expected to achieve more than €40bn in external revenue and €4bn in EBITDA, said RWE, on the basis of 2015 pro-forma figures.
RWE will continue with its conventional power generation and energy trading processes.
RWE CEO Peter Terium said: "The group’s restructuring is our response to the transformation of the European energy landscape.
"The new subsidiary will have its own access to the capital market and improve our growth prospects.
"At the same time, we are convinced that conventional power generation will remain an irreplaceable partner for renewable energy for decades to come. Our conventional power stations are the backup for renewables."
The firm has also secured approval from the European Commission to convert its coal-fired Lynemouth power plant in the UK to biomass.
The plant presently has a generation capacity of 420MW energy, which suffices power demands of over 450,000 households.
