ENKRAFT piles pressure on Energiekontor to change strategy

Energiekontor AG

07/07/2020 13:23

FRANKFURT, July 7 (Reuters) - Activist investor ENKRAFT has
stepped up its criticism of solar and wind park developer
Energiekontor  EKTG.DE , accusing management of failing to
address what it described as "great strategic weaknesses", a
letter seen by Reuters showed.
    ENKRAFT, which unveiled a stake of less than 3% in
Energiekontor in May, previously demanded a reshuffle of the
group's supervisory board as well as a review of its strategy,
citing deficits in those and other areas.  urn:newsml:reuters.com:*:nL8N2ED53U
 S8N2C804G 
    One major target of ENKRAFT's criticism has been
Energiekontor's three-member supervisory board, which includes
the group's two co-founders who together hold more than 51% of
the company, effectively giving them full control over it.
    This is going against the interests of minority
shareholders, ENKRAFT has alleged. It has also pointed to what
it sees as a misallocation of funds, including share buybacks,
adding this was eating into investments needed for growth.
    In a letter dated July 6, ENKRAFT said that Energiekontor so
far failed to properly address interests of minority
shareholders as long as they were not aligned with those of the
group's two co-founders.
    "We will make these weaknesses transparent regularly in the
future and take any measures to ensure rights of minority
shareholders are being protected, including legal steps where
necessary," Benedikt Kormaier, managing director at ENKRAFT,
said in the letter.
    Energiekontor said that while it welcomes the intensive
dialogue with investors and also believes the firm is
significantly undervalued, its corporate strategy is backed by
the vast majority of its shareholders.
    ENKRAFT has previously said that if no new strategy can be
agreed, the group should consider selling itself to create the
greatest value.
    Kormaier said that Energiekontor's share price, which has
gained nearly a quarter since ENKRAFT disclosed its stake, has
underperformed most of its peers. The group has a market value
of 333 million euros ($376 million).
    ($1 = 0.8846 euros)

 (Reporting by Christoph Steitz; Editing by Emelia
Sithole-Matarise)
 ((christoph.steitz@thomsonreuters.com; +49 69 7565 1269;
Reuters Messaging:
christoph.steitz.thomsonreuters.com@reuters.net))