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Sat 19 Sep 2015 01:36 PM

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RWE pours water on hopes for Gulf-based shareholder

RWE says joint projects in MENA region are possible, but denies report it is in talks with Abu Dhabi fund Aabar

RWE pours water on hopes for Gulf-based shareholder
Power lines lead away from a coal-burning power plant in Germany

Talks between RWE and an unnamed Gulf-based investor no longer focus on an equity stake in the German utility, a spokeswoman for RWE said on Thursday, dashing hopes that the ailing group could gain a new anchor shareholder.

An injection of fresh equity from outside has been touted as one of very few options for RWE as it labours under intense pressure from plunging wholesale power prices, 25.6 billion ($29 billion) euros of debt and heavy provisions against the costs of winding down nuclear assets.

The company said that option is now off the table but alternative collaboration is still possible.

"In our ongoing talks we are focusing on examining the possibilities for joint projects in the MENA (Middle East and North Africa) region and for taking our good relations towards a long-term partnership, such as a joint venture," the spokeswoman said.

Shares in the company pared gains after the comments but were still up 9.2 percent, recouping some of the heavy losses earlier in the week on concerns about its nuclear obligations.

RWE has been in talks with the unnamed investor for months, raising expectations that the group could receive fresh funds to invest in renewables and offset losses from its conventional coal- and gas-fired plants.

A source told Reuters previously that RWE was talking to green energy company Masdar.

RWE, Germany's largest power producer, also denied that it was in talks with Abu Dhabi fund Aabar about projects or the sale of a stake. German magazine WirtschaftsWoche had reported earlier that talks between the companies were at an advanced stage.

RWE already has a foothold in the Gulf after forming a joint venture with state-run utility Dubai Electricity & Water Authority (DEWA) in 2012 to provide consulting services to investors, energy suppliers and governments.

Last year RWE won a contract to help Dubai to set up an energy agency with the aim of boosting growth in the emirate through energy efficiency measures.

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