RWE deep in plans to spin-off Thames and American Water
Separation seen as necessary to raise RWE share price
Could be finalized by Friday
Berlin, October 23, 2005 -- as reported by Berliner Zeitung
After acquisitions that have cost them billions in the recent past, the Essen-based RWE multi-utility is facing an imminent about-face on the strategy for its international water business.
RWE CEO Harry Roels is rumored to be near a deal to spin-off UK water utilities Thames Water and North America's largest private water provider, American Water.
According to the
Berliner Zeitung, Harry Roels and his executive board managed,
under strict secrecy, to work out the conditions under which
RWE's Thames and American Water could be quickly split from
RWE's lucrative gas and electricity core business.
Then, the plans were
expected to be officially presented to the advisory board for
decision during an extraordinary meeting reportedly scheduled
By grouping the two
water companies under the umbrella of an independent Thames
Water the stakes in Berlin (Berliner Wasserbetriebe) and Zagreb
would be grouped with RWE Energy AG. The energy group leads the
other, much smaller water activities in Germany as well as
central and eastern Europe.
Analysts have described the financial results from the British and American water activities as a decided handicap to RWE's share price which is significantly below average.
Both Thames Water
and American Water have massive investments in the cards for
overdue infrastructure rehabilitation. These costs could only be
covered over time with price rises to consumers. The US and UK
authorities allow only
RWE spokespeople refused to issue any comment as is their policy on market speculation.