Strengthening renewable energies: RWE collects billions from shareholders

RWE is restructuring, relying on renewable energies and no longer on coal. The Dax Group is securing the necessary money for this through a capital increase. Institutional investors are taking hold, even if the competition for RWE grows.

The energy group RWE has obtained two billion euros of fresh money within a few hours for expanding its business with renewable energies. A capital increase by 61.5 million shares – that is ten percent of the share capital – has been placed with institutional investors, announced RWE. At EUR 32.55, the price was five percent below the Xetra closing price of EUR 34.24 and at the lower end of the range set by the accompanying banks. In late trading, the Essen group's share had already lost a good four percent.

RWE intends to use part of the proceeds to refinance the purchase of wind farm projects from wind turbine manufacturer Nordex. At the end of July, RWE announced that it would take over projects with a volume of 2.7 GW for around 400 million euros from Nordex.

Once a coal dinosaur

RWE intends to invest the remaining proceeds in the additional, short-term expansion of the portfolio of renewable energies, in the further development of the project pipeline and in further growth. The plans went beyond the 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.

For RWE, which has long been decried as a coal dinosaur, the decision to say goodbye to nuclear power and coal and the change to a green electricity producer is increasingly paying off. In the first half of the year, the Essen-based company increased adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) by 18 percent to 1.8 billion euros. But competition in the business with electricity from wind, sun or water is increasing. More and more companies, including oil multinationals such as BP, are entering the renewable energy market and causing prices to rise.