Two top-10 RWE investors won't back brown coal spin-off motion

FRANKFURT7DUESSELDORF (Reuters) -Two top-10 investors in RWE will not back a motion by activist shareholder Enkraft which asks Germany's largest power producer to prepare a spin-off of its brown coal activities, they said on Tuesday.

Enkraft's motion, which will be put to a vote at RWE's annual general meeting (AGM) on April 28, has been rejected by the group's management and its municipal shareholders, while shareholder advisory groups have recommended voting against it.

"We do not consider a quick spin-off of the lignite business, as Enkraft is now demanding, to be expedient," said Henrik Pontzen, head of sustainability and ESG at Union Investment, which holds 1.4% of RWE's shares.

"The environment is not helped if RWE emits less CO2 and another owner generates electricity from Rhenish lignite."

Brown coal, or lignite, is the most polluting type of coal.

Ingo Speich, head of sustainability and corporate governance at Deka Investment, said he would not back the motion to leave RWE's enough room for manoeuvre, still calling for a quick separation of the business.

"We will measure the entire RWE executive board including the supervisory board in this particular matter and make our judgement at the next annual general meeting."

The comments come a day after Enkraft said the Association of Municipal RWE shareholders (VkA), which represents municipalities owning 14.1% of RWE, could not exercise its voting rights at the AGM.

RWE plans to invest 50 billion euros ($53 billion) through 2030 to double its green energy capacity to 50 gigawatts in a push to become a global renewables heavyweight and turn a page on its carbon-intensive past.

Union Investment's Pontzen said RWE Chief Executive Markus Krebber was not ambitious enough in his efforts to transform the company, one of Europe's largest polluters, into a green energy champion.

($1 = 0.9356 euros)

(Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by Jan Harvey and Edmund Blair)