Municipal Shareholders Pressure RWE to Pay Dividends
The energy company RWE faces mounting pressure from municipal shareholders to pay out dividends in 2016, after canceling dividends last year due to the company’s tight financial situation.
“We expect RWE to pay out a  dividend again in the coming year,” Guntram Pehlke, the head of Dortmund’s municipal utility DSW21, told Handelsblatt.
Dortmund’s utility is the largest single municipal shareholder in RWE with a 4-percent stake. In total, German municipalities own a 20-percent stake in the energy company.
RWE’s decision last year to cancel dividends for the first time since the 1950s cost already strapped municipal shareholders €150 million ($156 million).
A spokeswoman for the company declined to say whether or not RWE would pay out dividends for 2016.
RWE has come under financial pressure as Germany’s transition to renewable energy has led to a collapse in wholesale electricity prices and has made coal and nuclear energy unprofitable.
A growing number of shareholders are considering pulling out of RWE after the company separated its renewables business into a spinoff called Innogy, which is still majority-owned by RWE but is also listed on the stock market.
Mr. Pehlke said RWE has to demonstrate to municipal shareholders that the company’s outlook is improving: “Otherwise, the municipal shareholders will have trouble explaining why they are engaged in RWE,” he said.