Capital increase for acquisitions: RWE wants to collect two billion euros

RWE wants to expand its portfolio of renewable energy projects. However, because more and more companies have recently been pushing into this area, prices are rising. In order to keep up, the group needs fresh money. He's now getting it from institutional investors.

The energy group RWE wants to get fresh money from its shareholders for the expansion of its business with renewable energies. In addition, the share capital will be increased by ten percent, said RWE. Measured at the closing price on Tuesday at 34.24 euros, the Essen-based company could collect around 2.1 billion euros. In Frankfurt late trading, however, the share lost a good four percent.

The placement should take place overnight and the shares will be entitled to dividends for the 2020 financial year. However, they are only offered to institutional investors in a private placement. The Executive Board, with the approval of the Supervisory Board, intends to determine and announce the exact number and price of the shares to be issued.

The proceeds from the capital increase are to be used for investments in the additional, short-term expansion of the portfolio of renewable energies, in the further development of the project pipeline and in further growth opportunities. This goes beyond the previous goal of increasing the installed capacity to more than 13 gigawatts (GW) by the end of 2022 and investing around five billion euros in renewable energies.

Part of the income from the capital increase will flow into the takeover of wind farm projects from wind turbine manufacturer Nordex and their implementation. At the end of July, RWE announced that it would take over Nordex wind farm projects with a volume of 2.7 GW for around 400 million euros.

For the RWE Group, long decried as a coal dinosaur, the decision to say goodbye to nuclear power and coal and the change to a green electricity producer has recently paid off more and more. In the first half of the year, the Essen-based company was able to increase adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) by almost a fifth to 1.8 billion euros. But competition in the business with electricity from wind, sun or water continues to increase. More and more companies, including oil multinationals like BP, are pushing into the market for renewable energies and causing prices to rise.