Energy Companies

E.ON Expected to Write Down Billions after Uniper Float

FILE - In this Nov. 24, 2014 file photo, smoke streams from the chimneys of the E.ON coal-fired power station in Gelsenkirchen, Germany. The International Energy Agency said Monday June 27, 2016 that each year about 6.5 million deaths worldwide are linked to air pollution and warns that the number will grow unless the energy sector steps up its efforts to slash emissions. (AP Photo/Martin Meissner, File)
E.ON will see billions up in smoke after Uniper float.
  • Why it matters

    Why it matters

    E.ON, Germany’s largest energy group, has split itself in two in response to a slump in power prices caused by the country’s green energy revolution. But its reorganization is being marred by big writedowns.

  • Facts

    Facts

    • Uniper, the fossil-fuel power plant unit spun-off from German electricity giant E.ON with effect from January 1, is due to be floated on the stock market in September.
    • Handelsblatt has learned that Uniper’s book value may have been overstated, and that major writedowns are likely to be needed both at Uniper and at E.ON following the IPO.
    • In E.ON’s spin-off report, Uniper’s net book value is put at €15.5 billion. Analysts and one manager familiar with the IPO said €4-€5.5 billion was a more realistic value.
  • Audio

    Audio

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E.ON, the German utility giant, will write down billions when it spins off Uniper, contains the group’s fossil-fuel power plants and energy trading activities, Handelsblatt has learnt.

The reason is that at the time of E.ON’s formal separation into two units at the start of the year, Uniper was overvalued in the company accounts, and the discrepancy is likely to become evident once the shares start trading, meaning that the value will have to be corrected by the end of the year.

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