August 22, 2012 / 2:15 PM / in 5 years

RWE still wants to sell Suewag stake after talks stall

DUESSELDORF/FRANKFURT (Reuters) - RWE (RWEG.DE) said it still wanted to sell its stake in regional power group Suewag even though talks on a sale have stalled for now, about a month after S&P cited slow progress on the group’s asset sale program as one reason for its rating downgrade.

“Negotiations have come to a standstill,” a spokesman for Germany’s No.2 utility said on Wednesday, adding that the group could not agree on a price with a bidding consortium consisting of regional utilities.

The company, however, said that it was still open to talks with interested parties, reiterating its target to sell assets worth up to 7 billion euros ($8.74 billion) by the end of 2013.

Regional utility EVM - a member of the bidding consortium - said that no further negotiations were planned, in a statement.

Analysts have put the value of RWE’s 77.6-percent stake in Suewag at 700-800 million euros.

In July, S&P downgraded RWE’s long-term corporate credit rating to “BBB+” from “A-”, pointing to slow progress regarding the group’s asset sales.

So far, RWE has sold a 19.3-percent stake in regional utility VSE for 83 million euros and has come close to selling its 24.95 percent stake in water utility Berlinwasser for 618 million euros.

Apart from Suewag, RWE wants to sell Czech gas transmission system operator Net4Gas, assets from its oil and gas exploration unit DEA RWEDE.UL, and a stake in regional utility Kevag.

Germany’s big utility companies have been hit by the government’s decision last year to shut all nuclear power stations in the country by 2022.

RWE last week reported slower profit growth than that of main rival E.ON (EONGn.DE), and said it would cut an additional 2,400 jobs on top of 8,000 job cuts already planned.

Reporting by Tom Kaeckenhoff and Christoph Steitz

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