FRANKFURT (Reuters) - Germany’s largest utility E.ON has reorganized its businesses, taking a step toward spinning off parts of the group this year to respond to a sector crisis that has eroded profits and sent its shares to record lows.
E.ON said it separated its coal, gas and hydro power plants as well as energy trading business effective Jan. 1, putting it on track to list a majority of this new business it has named Uniper in the second half of the year. It plans to sell the remaining stake in the medium-term.
E.ON announced plans in late 2014 to split itself in two, leaving the established company with renewables, energy networks and services to try to battle declining wholesale power prices that have pushed many of its conventional power plants into loss.
“This liberates us from continually having to make compromises,” E.ON Chief Executive Johannes Teyssen said in a statement. “Our ambition is for both companies, which soon will be legally independent of one another, to become leading players in their respective energy worlds.”
The plan, which still needs shareholder approval at a meeting scheduled for June 8, hit a snag last year when E.ON had to take back the German nuclear plants it originally wanted to move to Uniper, bowing to fears that it could dodge responsibility to pay for their dismantling.
Uniper has 40 GW of power generation capacity and is led by Klaus Schaefer, who served as E.ON’s chief financial officer until mid-2015.
Reporting by Christoph Steitz; Editing by Keith Weir