RWE CEO says rapid lignite spin-off to pose incalculable risks

A rapid spin-off of RWE AG's (ETR:RWE) lignite business would not speed up the German power major's sustainability strategy and would create incalculable risks for the group and its shareholders, chief executive Markus Krebber said as a response to increasing pressure from an activist investor.

The energy group is seeking to implement its sustainability- and growth-focused strategy as quickly as possible but the separation of the remaining coal operations would not save "a single tonne in CO2 emissions," Krebber says in the draft of his speech for the annual general meeting on April 28.

His statement comes as a response to a fresh attempt by Enkraft Capital GmbH, a significant minority investor in the group, to push for a rapid spin-off of the lignite business.

In a separate statement, both the executive board and the supervisory board of RWE called on shareholders to vote at the annual meeting next week against the motion filed by the activist investor which insists on the adoption of a resolution for the separation of the coal operations.

RWE's coal business is bundled in a unit with the nuclear business and is not part of the group's core operations which include all renewable energy activities as well as supply and trading.

In the speech, Krebber notes that the security of supply must be ensured for the coming winter which may result in the use of more coal-fired power plants on a temporary basis in order to reduce gas consumption.

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