22 July 2010 18:49 [Source: ICIS news]
(updates with comment from Evonik in paragraphs 8-10)
TORONTO (ICIS news)--An EU Commission proposal that Germany end its subsidised hard-coal production by 2014 – four years earlier than planned – could affect strategies at specialty chemicals major Evonik, a German chemical union leader said on Thursday.
Proceeds from an eventual initial public offering of Evonik were meant to help pay for environmental costs associated with the phase-out.
Michael Vassiliadis, head of
A phase-out by 2014 meant that the associated costs would have to be financed four years earlier than planned, and this could only be achieved by selling parts of Evonik, he said.
Vassiliadis also criticised
“I just cannot understand why the minister concedes the German position [of a phase-out by 2018] without further ado,” Vassiliadis said in an interview with daily Westdeutsche Zeitung. The paper issued a separate press release on the interview.
Evonik spokesperson Barbara Muller told ICIS news her company supported the existing legal arrangements that provided for a phase-out by 2018.
The existing law to finance the phase-out, the German "Steinkohlefinanzierungsgesetz", was good legislation, she said.
"Evonik is well-positioned for the future, and it is on a clear course for an initial public offering on stock markets," she added.
RAG-Stiftung had been looking to list Evonik and use the proceeds to pay for environmental and related expenses as mines are closed for the phase-out programme running to 2018.
In 2008, RAG sold a 25.01% stake in Evonik to private equity firm CVC and shelved plans to list Evonik because of unfavourable capital market conditions. However, it remained committed to eventually listing Evonik and raising additional funds, it said at the time.
The European Commission said this week that its proposal was aimed at a “definite closure” of uncompetitive mines by 1 October 2014. “There should be no doubt about this. Companies need to be viable without subsidies,” it said in a statement.
In related news, Evonik earlier this month aligned management teams of its large German apartment rental apartment business.
The chemicals major plans to focus on its core specialty chemicals business, while its real estate business, as well as its energy business, are to be managed as independent units.
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