UPDATE 3-E.ON to divest Urenco stake this year or next

Wed Mar 13, 2013 12:38pm EDT

Related Topics

* Westfalen Weser, Mitte sales to close in 2013 or 2014

* Expects all three deals to be worth more than 2 bln eur

* Swings to net profit of 2.22 bln eur vs 2011 net loss

* Shares down 0.2 pct

By Christoph Steitz and Tom Käckenhoff

DUESSELDORF, Germany, March 13 (Reuters) - E.ON said it wanted to close the sale of its stake in uranium enrichment firm Urenco this year or next, as part of a drive to shed assets and cut its massive debts.

The utility, hit by Germany's decision to pull out of nuclear power, stagnating energy demand in Europe and high borrowings, plans to offload up to 20 billion euros worth of operations, including non-core nuclear businesses.

It has sold assets worth about 17 billion euros so far and at the end of December had debt of 35.9 billion euros.

E.ON and peer RWE each hold a third of Urenco while the Netherlands and Britain share the remaining stake in the company, which enriches uranium into nuclear fuel sold to power stations.

E.ON's Chief Financial Officer Marcus Schenck put the book value of the company's stake at a "high double digit million euro amount".

Market estimates of the value of the whole of Urenco differ widely between 2.5 billion euros and 10 billion euros ($3.3-13 billion),

Germany's top utility also said it was planning to close the sale of its regional units E.ON Westfalen Weser and E.ON Mitte in either 2013 or 2014, adding that the three transactions would have a total value of more than 2 billion euros.

STAGNATING DEMAND

Faced with lacklustre demand and low power prices, European utilities are being forced to close down loss-making power plants built before the recession and stagnating population growth put a damper on energy consumption in Europe.

Total primary energy demand in the European Union is expected to decline by 2 percent in 2010-2015, the International Energy Agency (IEA) estimates, compared with a 10 percent rise globally.

Germany's nuclear exit as well as pricey gas contracts - forcing the group to pay for gas at higher price that it can sell it for - pushed E.ON deep into the red in 2011, when it posted a net loss of 2.22 billion euros.

Through successful contract negotiations with suppliers and the absence of charges last year, the group swung to a net profit of 2.22 billion euros in 2012.

"E.ON has come back to profit, which is good news. Nice profits usually suggest a healthy dividend," a Frankfurt-based trader said.

E.ON confirmed it would propose a dividend of 1.10 euros per share for 2012.

At 1600 GMT, shares in the group were down 0.2 percent.

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