Green Energy Could Cause The Largest Bankruptcy In German History

RWEOne of Germany’s largest electrical companies is facing bankruptcy due to the enormous amounts of money it poured into green energy, according to a report published Wednesday by the German newspaper Frankfurter Allgemeine Zeitung.

The German utility Rheinisch-Westfälisches Elektrizitätswerk (RWE) was forced by the government to shut down many of its profitable nuclear reactors and build expensive wind and solar power. The government’s mandate to replace nuclear reactors with wind or solar power cost over $1.1 trillion. The company has a 46 percent chance of going bankrupt within the next two years, according to investment groups.

“It is the sheer distress which is behind the project. That’s because RWE needs huge amounts of money very pretty soon. Especially for its nuclear phase-out,” Frankfurter Allgemeine Zeitung reported Wednesday. “A good 10 billion euros have been reserved already. But that is hardly enough. The Initial public offering (IPO) is presumed to generate the additional resources that are required. RWE cannot afford to accumulate more debt. It is already loaded with €45 billion [$50 billion in] long-term liabilities on the balance sheet, almost eight times its equity, a menacing rate, while the rating agencies have given RWE just above ‘junk’ status.”

RWE’s overall earnings fell by almost 10 percent between 2014 and 2015 and are predicted to fall by up to 14 percent this year. The company’s attempt to sell stock reeks of an effort to raise the money required to stave of bankruptcy.

“If the IPO goes wrong, then RWE is – as is usual for companies without a future – a case for the administrator,” the paper continued.  “It would be the largest bankruptcy in German economic history.”

RWE’s only hope to avoid bankruptcy may be a lawsuit by German utilities suing the government for $21 billion in damages due to the country’s plan to shut down all nuclear reactors by 2022.

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    Amber

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    Brilliant , shut down one of the cleanest sources of energy for ECO- OPTICS ?
    Germany faces self induced energy reliability issues and now a 21 $ Billion lawsuit
    from people that know which buttons to push . .
    They are going to need lots and lots of green .

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