Last year, EON the biggest utility company of Germany, created a separate business unit (SBU); Uniper, to devote its efforts to renewable energy business.
Advertisement
In an investor presentation, NRG says it plans to spend $1.3B on reducing debt and buying back shares through 2016, including $250M in share repurchases this year, and plans to cut $150M in costs starting next year.
Analysts are also expecting quarterly earnings of $0.62 per share when the company next issues their earnings report on or around 2015-11-04.
The separation of many of NRG’s remaining renewable-energy enterprises from its conventional power business follows its creation of NRG Yield Inc., a publicly traded company to which NRG transferred some of its utility-scale wind and solar holdings in 2013. NRG Yield is a majority-owned affiliate company formed in 2012. NRG Energy took possession of these assets through its USD-2.64-billion (EUR 2.31bn) takeover of Edison Mission Energy (EME) that was completed in the spring of 2014. Through reorganization, the company expects to conserve $1 billion in FY16, which could be used to reduce the long term debt of $20 billion.
GreenCo will own the parent company’s solar installation plant and electric-vehicle charging business. On Friday, NRG Yield announced that it will acquire 75% stake in NRG’s wind projects. NRG is a wholesale power generator engaged in the ownership and operation of power generation facilities; the trading of energy, capacity and related products; and the transacting in and trading of fuel and transportation services.
The new entity would look for strategic partnerships. Although sales of solar systems to homes have been brisk, he said, the company has had difficulty installing panels fast enough. It has said that the previous expectations of 35,000 to 40,000 customers’ addition seems unrealistic. The enterprise lost $65 million pretax in 2014, while NRG as a whole earned $134 million.
For more than one year, commodity market has not performed well.
Advertisement
Crane told investors that splitting the company would help NRG to better capitalize on opportunities posed by the increased penetration of solar and other distributed generation technologies.
