World's Energy

May 6 2009 - Financial Times by Chris Bryant - Wulf Bernotat, the chief executive of Eon, announced on Wednesday that he would quit Germany’s biggest utility in 2010. Mr Bernotat, 61, one of the country’s best known businessmen, told Eon’s annual general meeting in Essen that he would not seek the renewal of his contract next year in order to pursue “new professional challenges beyond the operational business”. He pledged to work with his “full energy” during the next 12 months and would leave behind an “integrated, internationally-positioned and competitive company”. The company’s shares traded 2.4 per cent lower at €25.69 following the news. Speculation had mounted about Mr Bernotat’s future after Eon recorded an inauspicious start to 2009. The Düsseldorf-based company has not been left untouched by the economic crisis, forcing the company to lower its earnings forecasts, announce cost-cuts and take charges on recent acquisitions. Eon’s shares have tumbled by around 40 per cent since last year — more than some of its rivals — which has come as a painful blow to shareholders accustomed to bumper profits and the company outperforming RWE, its German rival. A period of consolidation began in February when Mr Bernotat announced a €1.5bn ($2bn) cost-cutting programme and €3.3bn in writedowns related to acquisitions in Italy and the US. A month later, Mr Bernotat said net income would fall by 10 per cent this year and announced that Eon would divest at least €10bn of assets by the end of next year, an about-turn after a period of rapid expansion. Mr Bernotat, who became chief executive in 2003, launched a whirlwind acquisition spree in 2006 which maintained Eon’s dominant position in the European market but left it nursing an enlarged debt pile. Although he failed in 2007 to acquire Spain’s Endesa for €43bn, he struck a deal with Italian utility Enel and Acciona, the Spanish construction group, to buy €11.8bn of assets in Spain, Italy and France. Eon also spent around $6bn to acquire OGK-4, a Russian power company. Ulrich Hartmann, Mr Bernotat’s predecessor and the head of Eon’s supervisory board, said a successor had not yet been identified. However, people close to the company said Johannes Teyssen, who last year was promoted to vice-chairman of the management board of management, was the clear favourite.