RWE’s share sale fell flat yesterday as investors held back amid the Standard & Poor’s warning of a credit rating cut to Eurozone countries.
The German utility said it raised €2.1bn (£1.8bn) by selling 80.4m shares to institutional investors at €26 a piece – well below the €2.5bn it had hoped for when it announced its plans in August.
RWE has also been hit by the German government’s decision – made in the wake of Japan’s Fukushima nuclear disaster -- to phase out nuclear power completely by 2022, meaning that RWE will have to produce electricity at a higher cost while wholesale prices could falter due to slow economic growth, stagnating populations and rising energy efficiency.
It planned to reduce debt with the capital raising.
Shares for the company, Germany’s second largest utility, yesterday slumped 7.2 per cent to close at €28.15. In earlier trading they had dropped as much as 12 per cent and are down 44 per cent from the start of the year.