Sweden's Vattenfall Europe AG to divest 74.9% stake in power grid back to Hamburg- report
Sweden-based firm Vattenfall Europe AG will be selling back to the city the 74.9% stake it holds in Hamburg's power grid operator after its citizens voted to buyback the energy grid, Bloomberg reported. Finance Ministry Spokesman Daniel Stricker told Bloomberg by phone that the city will repurchase at a later time, the 74.9% district heating grid stake held by the Swedish firm. The interview was held ahead of a press conference that will give more information about the deal, the report said.
In a separate interview, a source told Bloomberg that a minimum price had already been agreed upon by Vattenfall and Hamburg and that a final price will be determined by an outside auditor. The person, who spoke on the condition of anonymity because the information is private, said Vattenfall will retain control of the district heating firm. The city will have the choice of making an outright purchase sometime in 2018 or 2019.
The state-owned company is winding down portions of its decades-long global expansion after it announced writedowns amounting to $4.6 billion in July last year. Since German Chancellor Angela Merkel's decision to eliminate the use of nuclear power by 2022 and move towards renewable energy, commercial utility firms with operations in Germany are seeing a constriction in their margins, the report said.
The report cited Vattenfall as saying that 1.1 million households and businesses in the second largest city in Germany are served by the power grid which supplies 13 billion kilowatt-hours annually.
A press release on the Vattenfall website dated January 10, Vattenfall said it is negotiating the sale of its energy grids in Hamburg as a result of the public referendum held in September. In the statement, Tuomo Hatakka, Head of Vattenfall Region Continental/UK, said, "We are having constructive negotiations with representatives of the City of Hamburg and expect to finalize the negotiations within the next week. After that, the Hamburg Senate and our Board need to decide. We will of course inform internally and externally as soon as we have concluded the negotiations, whatever the outcome may be."