FRANKFURT (Reuters) – German utility E.ON sold 200 million new shares as part of a capital increase to raise 1.35 billion euros (1.17 billion pounds) to strengthen its balance sheet ahead of steep payments to a state-run nuclear fund.
The group had said in January that it will transfer 9.8 billion euros to a state fund set up to pay for the nuclear sector’s long-term liabilities.
“In view of the impact from the payment of the risk surcharge to Germany’s state-run nuclear fund in mid-2017, the purpose of the capital increase is to strengthen the equity and liquidity basis of E.ON,” the company said in a statement on Thursday.
On Wednesday, after posting a record net loss, the company had said it would soon provide clarity on how it intends to cut debt and fund a 2 billion euro project to store radioactive waste.
The new shares were issued as part of its authorised capital and were sold to institutional investors, with Bank of America Merrill Lynch and Citigroup acting as joint bookrunners.
The price range for the placement is 6.71 euros to 6.72 euros per share, BofA Merrill Lynch said in a separate statement. The books have been covered, it added.
(Reporting by Edward Taylor; Editing by Susan Thomas and Grant McCool)
