Energy Transitions RWE Moves on Top Management

Markus Krebber, the current head of RWE's energy trading business, will take over as chief financial officer of the entire group, which is preparing to partially spin off its renewable energy business, Handelsblatt has learned.
Is there new energy at RWE?

Key management changes around RWE's split into two new units have now been set.

Markus Krebber, the current head of RWE Supply and Trading, the energy trading arm of the German utility giant, will take over as chief financial officer of the entire RWE group, Handelsblatt has learned.

He will replace Bernhard Günther, who as chief finance officer will join RWE Chief Executive Peter Terium at the renewables firm to be partially spun off from the parent company by the end of this year.

RWE declined to comment, but sources familiar with the matter said Mr. Krebber received the backing of RWE's supervisory board’s committee, in preference to the other possible contender, Frank Weigand, who is the finance board member of the nuclear power division, RWE Generation.

The supervisory board, the German version of a non-executive board, will meet Thursday to discuss the issue.

The course set by RWE at the end of last year represents a radical change in strategy.

RWE said last year that it would split itself into two, with one part focusing on renewable energy, and the other sticking with its more traditional fossil fuels, nuclear, and energy trading business.

Mr. Terium will take charge of the new renewables section, which has the working title Newco, alongside Mr. Günther. It would have around four fifths of RWE's current revenues and two thirds of the total working force.

RWE's current deputy-chief executive, Rolf Martin Schmitz, will head up the more traditional company. He and Mr. Krebber will have the more trying task of pulling RWE out of the red and turning around the ailing nuclear power division. Former SAP finance board member, Werner Brandt, will be supervisory board chairman of both companies.

 

Restructuring at RWE-01

 

The new subsidiary will be formally established on April 1. Mr. Terium wants to retain responsibility for the spin-off and IPO of the new company in the coming months. He will need to perform the balancing act of giving clarity to Newco investors on the one hand, while remaining responsible for restructuring the 'old' RWE on the other.

The course set by RWE at the end of last year represents a radical change in strategy. In the space of one year, Germany’s biggest generator of electricity aims to separate the promising business with green and decentralized energy from its traditional core business, the operation of big coal, gas and nuclear power stations.

The Newco IPO is intended to free up investment in new areas of growth, at a time when RWE is haemorrhaging profits from conventional electricity generation. Just two weeks ago, it wrote off €2.1 billion, or $2.3 billion, on power stations and reported net losses of €200 million – a reason for the board to propose the cancellation of dividend payments to common stockholders.

 

Quelle: Commerzbank
Markus Krebber is to take over as CFO of the RWE group.

 

That creates serious problems for numerous cities and districts in the west German Rhein and Ruhr region, which still own nearly a quarter of the stock. So the four representatives of the municipal supervisory boards will protest against the non-payment of dividends at the meeting on Thursday. But as the employees’ representatives on the board support the initiative, the communes will be unable to prevent it.

Mr. Terium will justify the cancellation of dividend payments to the supervisors with the current dramatic situation of electricity generation. Right now, on the futures market a megawatt hour costs hardly more than €20 and that applies to 2017, 2018 and 2019. At these prices, hardly any power station can be operated at a profit.

Three years ago, wholesale electricity prices peaked at more than €50 per megawatt hour.

 

Jürgen Flauger covers the energy market for Handelsblatt, including electricity and gas providers, international market developments and energy policy. To contact the author: [email protected]