German utility EnBW (EBKG.DE) announced that it is in discussions with its major shareholders regarding a potential capital increase of around €3 billion ($3.3 billion). This move is intended to support the company’s growing investment needs as it aims to expand its role in Germany’s energy transition.
The decision on whether to proceed with a share issuance will be made by the company’s shareholders at the upcoming annual general meeting, following a proposal by the management and supervisory boards, EnBW said in a statement on Friday.
Following the news, shares in EnBW, which has a limited free float of just 0.39%, rose by 2.1%.
EnBW, primarily owned by the German state of Baden-Wuerttemberg and local municipalities, is planning to increase its investments in energy projects to around €50 billion by 2030, up from the previously expected €40 billion. These projects include the development of new wind and solar parks, hydrogen-ready gas power plants, energy grid expansions, and electric mobility infrastructure.
“This results in above-average capital requirements that cannot be covered by operating income alone,” the company said. To meet these requirements, EnBW is exploring various financing options in light of its historically high level of investment.
In addition to potential equity financing, EnBW is utilizing its access to debt markets, supported by favorable credit ratings. The company holds a long-term issuer rating of Baa1 from Moody’s and A- from Standard & Poor’s.
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