Innogy listing may be biggest IPO in a decade

RWE’s renewables, network and retail business, Innogy is expected to reach $5.6bn when it is listed next month, a figure that would make it Europe’s largest Initial Public Offering since 2007, when Russia’s VTB bank went public.

“We believe that Innogy is an attractive investment,” said Innogy Chief Executive Peter Terium, who will also continue to serve as CEO of parent RWE until the successful listing.
Peter Terium of RWE
The German utility hopes its spin-off entity attracts investors who dumped utility stocks due to their exposure to ultra-low wholesale prices.

The listing would give Innogy a market capitalisation of up to EUR20bn, more than twice RWE’s current value, showing the appetite for regulated assets and the discount on RWE’s power generation assets.

Germany’s number one utility also recently launched its restructuring through spin-off Uniper whose generation- and trading based business model has met with a mixed market reception.

Innogy’s business model will be similar to that of larger peer E.ON, with a key difference, according to Reuters: E.ON will still carry the billions of liabilities related to the shutdown of its German nuclear plants.

In Innogy’s case, that responsibility stays with parent RWE, removing a major uncertainty for potential Innogy investors.

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