Claims € 300m in damages / Insists on repayment of loan

EWE sues VuB

Oldenburg, Germany, 16 September 2008. Oldenburg-based energy group EWE has filed for arbitration against VNG Verwaltungs- und Beteiligungsgesellschaft (VuB). EWE seeks a ruling that VuB’s bid to terminate the consortium agreement is invalid and that the agreement is still in force. The respondents are VuB and its shareholders with the exception of Jena-Pößneck. The major VNG shareholder has called on Stadtwerke Jena-Pößneck to join EWE in suing VuB. The sum involved has been set at € 300m. EWE has named Professor Mathias Habersack of Tübingen as arbitrator.
 
“There are no valid grounds for terminating the agreement,” explained EWE’s Chief Executive Officer Dr. Werner Brinker. In spite of serious breaches of confidence by VuB in the past, EWE continued to stand by the consortium agreement. “We have VNG’s well-being in mind and want to develop the enterprise,” he mentioned. In addition to claiming damages, EWE reserved the right to demand repayment of a loan granted to VuB in 2004 to enable it to increase its equity investment in VNG. In return for this support the consortium agreement was signed, giving EWE the right of first refusal in respect of the VNG shareholding.

The aim of the agreement is to bundle municipal authority influence on VNG AG. The assurances that EWE gave municipal authorities in eastern Germany in the 2003 agreement included a joint strategic approach and the retention of VNG’s Leipzig location. These guarantees are jeopardised by VuB’s bid to terminate the agreement.