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RWE's business Plan

An acquisition spree before Mr Roels's (former Shell executive who took over as chief executive in February 2003) arrival, in which RWE bought American Water Works, Thames Water and Innogy in the UK, and Transgas, the Czech gas company, resulted in soaring debt. So far Mr Roels has made his mark by selling off non-core assets.

RWE's goal is to reduce net debt below Euros 17bn (Dollars 21bn) by the end of 2005. Adjusted for disposals and currency effects, the current level is Euros 17.7bn.

RWE has identified Europe, including the UK and eastern European countries, as well as the North American water market, as its main business areas. Activities in other areas are being reviewed.

Mr Roels expressed concern about recommendations last week by Ofwat, the UK water regulator, which would curtail significantly Thames Water's plans to increase prices (emphasis is poster's) and investment spending.

That could have a significant impact on Thames Water's business plan - although Mr Roels said it was too early to speculate about effect as RWE would push for changes before final arrangements were published in December and appeal to the UK competition authorities if necessary. "There is always a Plan B," he said.
 


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