INTERVIEW - German MVV eyes more local firms, renewables
Date: 31-Jan-02
Country: GERMANY
Author: Claire-Louise Isted
The 10 percent capital increase will raise 80 million euros, while the sale of MVV's 26 percent stake in gas supplier GVS, expected mid-year, should bring the firm up to 200 million euros.
"We plan to spend two thirds of funds raised on stadtwerke (local utility) acquisitions and one third on renewables," MVV Finance Director Michael Kirsch told Reuters in an interview late on Tuesday.
"We aim to increase the share of renewables in our turnover to 10-15 percent from less than five percent now by 2004-5."
MVV wants to buy more medium-sized stadtwerke with low power production in regions with an industrial and commercial customer base and a population of 100,000-400,000 people.
Kirsch said the firm, which is Germany's seventh biggest utility, plans to buy 20 stadtwerke by 2005 to ensure it can compete against bigger rivals.
"We are interested in bidding in the spring for an up to 49-percent stake in stadtwerke Muenster, 25.1-49 percent in Wuppertal and 49 percent in Koblenz," Kirsch said.
MVV will not bid for Luebeck in Schleswig-Holstein or Heilbronn in Baden-Wuerttemburg.
"Luebeck is too far away and based on the coast, while Heilbronn has no electricity and is too close to the region of EnBW , which dominates power in the area," Kirsch added.
"We don't want stadtwerke with high production because that would not be favourable in the current competitive situation."
Muenster is attractive because it has invested in wind and biomass, while Wuppertal is less appealing because it has a lot of conventional generation, Kirsch said. MVV has yet to review the memorandum on the Koblenz tender.
MVV already owns stakes in stadtwerke Ingolstadt in Bavaria, Offenbach near Frankfurt, Solingen in North Rhine Westphalia and Koethen in the eastern German Saxony-Anhalt state.
In addition to the capital increase, MVV's majority owner, the city of Mannheim will increase the utility's investor base by selling some shares on the stock market later this year.
The city will cut its 73 percent stake to 58 percent, increasing the free float in MVV shares to 25 percent from 12.3 percent presently.
The city will sell a further seven percent of its stake within two years, bringing its total share down to 51 percent.
MVV said yesterday it increased its earnings before interest and tax (EBIT) in the last business year - ending on September 30 2001 - by 36 percent to 133 million euros and its turnover by 82 percent to 1.2 billion euros.
It targets a turnover of 1.53 billion euros this year.
MVV said a key factor in its strong results was the income raised from the sale of its 1.9 percent stake in EnBW to France's EdF for 111 million euro (net) last February.
The firm's turnover in power sales increased 161 percent last year to 538 million euros, by 62 percent to 133 million euros in heating and by 24 percent to 267 million euros in gas.
