RWE, Germany’s biggest energy company, is in danger of going belly up. It would be the largest bankruptcy in German economic history.
RWE has no future. Germany’s biggest power producer, founded in 1898 – has acknowledged as much. Any new business, new ideas, new technologies, and therefore the future, will no longer be part of the traditional company, according to the plans by CEO Peter Terium. Instead, a new company will be set up to join the stock market by year’s end.
It is the sheer distress which is behind the project. That’s because RWE needs huge amounts of money very pretty soon. Especially for its nuclear phase-out. A good 10 billion euros have been reserved already. But that is hardly enough. The Initial public offering (IPO) is presumed to generate the additional resources that are required. RWE cannot afford to accumulate more debt. It is already loaded with €45 billion long-term liabilities on the balance sheet, almost eight times its equity, a menacing rate, while the rating agencies have given RWE just above “junk” status.
If the IPO goes wrong, then RWE is – as is usual for companies without a future – a case for the administrator. […] It would be the largest bankruptcy in German economic history.