E.ON more than halves value of Nord Stream 1 stake as uncertainty grows

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FRANKFURT/DUESSELDORF, Aug 10 (Reuters) – E.ON (EONGn.DE), Europe’s largest energy network operator, on Wednesday reduced the value of its stake in the Nord Stream 1 gas pipeline by around 700 million euros ($715 million), citing “increased uncertainty” over the impact of the war in Ukraine.

The pipeline, which currently transports gas from Russia to Germany at just a fifth of its capacity, embodies an energy impasse that has pitted European gas-dependent states against major supplier Moscow following its offensive in Ukraine.

“The current energy crisis finally makes it clear that Europe needs to transform its energy system. To be independent of Russian gas. To ensure security of supply,” E.ON chief executive Leonhard Birnbaum told reporters. .

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E.ON had said in March that the 15.5% stake, held indirectly through the company’s pension fund, had a book value of 1.2 billion euros – translating into a 58% decline in the value of the stake – but had warned against a value adjustment.

Chief Financial Officer Marc Spieker said the value of the stake was now €500 million.

Asked if E.ON was considering selling its stake, CEO Birnbaum said the company remained committed to the holding company and was exercising its rights as a shareholder in the project.

However, E.ON said Nord Stream 1’s shareholders’ committee, which also includes majority shareholder Gazprom (GAZP.MM), France’s Engie (ENGIE.PA), Wintershall Dea (WINT.UL) and Dutch Gasunie (GSUNI.UL), did not meet. so far this year, Spieker said.

E.ON also said in March that an adjustment to the value of the pipeline stake would negatively impact pension provisions and net debt, but would not trigger liquidity issues.

E.ON also released first-half results that showed a 15% decline in first-half adjusted basic profit (EBITDA) to 4.06 billion euros, sticking to its 2022 outlook of an adjusted EBITDA of between 7.6 billion and 7.8 billion euros.

($1 = 0.9792 euros)

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Reporting by Christoph Steitz, Tom Kaeckenhoff and Vera Eckert; Editing by Paul Carrel and David Holmes

Our standards: The Thomson Reuters Trust Principles.

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