Brinker: “This has no effect on our strategy.”
EWE to Account for VNG under the Equity Method in the Future – Harms Resigns from VNG Management Board
Oldenburg, August 2, 2007. Oldenburg-based EWE AG is to apply the equity method in the future when including its affiliated company VNG – Verbundnetz Gas AG, Leipzig in its consolidated financial statements, based on the level of its stockholding. To date, EWE has shown VNG as fully consolidated, in accordance with German commercial law. The company decided to change its consolidation method as VNG did not provide the necessary figures for a full consolidation in the course of its half-yearly reporting.
Furthermore, EWE COO Heiko Harms has resigned from the VNG Management Board with immediate effect, due to possible conflicts of interest. The Chairman of the VNG Supervisory Board, Dr. Karsten Heuchert, has already been informed.
“This has no effect on our strategy. We are keeping our VNG stock and intend to continue developing the company,” underlined Dr. Werner Brinker, CEO of EWE.
EWE holds some 47.9 percent of VNG stock and is linked by a syndication agreement with VNG Verbundnetz Gas Verwaltungs- und Beteiligungsgesellschaft mbH (VNG-VuB). The partners jointly hold about 74 percent of VNG. At the election for the Chairman of the VNG Supervisory Board held on May 15, not all Supervisory Board members appointed by EWE’s syndicate partner VNG-VuB cast their votes for EWE’s candidate. This voting behavior contravenes a key provision of the syndication agreement. The syndication agreement stipulates, among other things, that a representative of EWE is to be elected as Chairman of the VNG Supervisory Board.
Independently of its decision to account for VNG under the equity method in its consolidated financial statements, EWE will therefore pursue its endeavors to restore a situation consistent with the syndication agreement. Several meetings have already been held with VNG-VuB on the subject, and discussions will be continued in the near future.
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