FRANKFURT, Aug 1 (Reuters) – German holding company KSBG plans to sell electricity company Steag, a Steag spokesman said on Monday after business daily Handelsblatt reported on the plan.
KSBG, Germany’s fifth largest utility company, combines stakes in utilities in Duisburg, Dortmund, Bochum, Essen, Oberhausen and Dinslaken and is based in Essen.
Handelsblatt said the company will soon set up an investment bank. Citing sources close to the process, it is said that the firm could receive 2 billion euros ($2.05 billion).
The report says that Steag, which employs 5,754 people, wanted to capitalize on its good market position in the face of record electricity prices. .
The sale will also relieve KSBG of high pension contributions and high margin requirements on power purchases.
Steag’s 2021 turnover rose 37% to €2.77 billion, while earnings before interest and taxes (EBIT) increased by a fifth to €234 million.
But like competitors, it is facing price volatility and market turmoil driven by Russia’s cuts in gas exports to Europe and global energy shortages amid the post-COVID recovery.
On the positive side, Steag could extend the operation of some coal-fired plants as Germany is expected to save limited gas reserves for purposes other than burning it for power. read more
Along with coal-fired power plants, Steag also operates wind and solar power plants, gas and waste incinerators, and offers energy-related services.
($1 = €0.9774)
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Reporting by Vera Eckert, editing by Miranda Murray and Jason Neely
Our standards: Thomson Reuters Trust Principles.
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