EXCLUSIVE-Amprion main owners consider options for stakes as funding needs rise, sources say

By Amy-Jo Crowley and Christoph Steitz

LONDON/FRANKFURT, Feb 13 (Reuters) - Major owners of Amprion, Germany's second-biggest power transmission grid, are considering selling stakes to new investors in the face of growing funding needs for energy networks across Europe, two people with knowledge of the matter said.

Some members of M31, a joint venture of investors that owns 74.9% in Amprion, are reviewing options, including shifting holdings to co-shareholders as well as divesting stakes, the people said, adding deliberations were at an early stage.

Amprion said it could not comment on matters relating to its main owner M31, saying it was constantly evaluating financing options for its investments and that it was in talks with various financial institutions to that effect.

M31 and m3one, which handles the management of all matters relating to the joint venture, both declined to comment.

SKY-ROCKETING FINANCING NEEDS

With a grid length of around 11,000 km (6,835 miles) and a regulated asset base - a key gauge of network valuation - of 11.7 billion euros ($13.9 billion), Amprion is Germany's number two high-voltage grid operator after TenneT Germany.

Some shareholders are reviewing their holdings because of sky-rocketing costs of modernising, maintaining and securing Europe's energy grids, the sources said.

Amprion plans to spend more than 36 billion euros by 2029, which requires regular capital increases backed by its owners.

Most recently, Amprion said in December that its shareholders provided 2.2 billion euros in equity.

While grids - which form the backbone of power supply - require more funding for expansion, they offer regulated returns in the mid-single-digit percentage range, making them an attractive investment for infrastructure and pension funds.

M31's biggest shareholder is AEBG, which is backed by five pension funds led by AEVWL. AEVWL told Reuters Amprion's shareholders would have to carefully weigh whether to buy more, sell or sit still and be diluted in case of a potential capital increase.

"Every professional investor will have to consider this decision matrix," Markus Altenhoff, AEVWL's head of capital investment, said in a statement in response to Reuters questions.

M31's other shareholders include Munich Re's MUVGn.DE asset management arm MEAG Munich Ergo, Swiss Life SLHN.S, Talanx TLXGn.DE, Commerzbank's CBKG.DE Commerz Real and insurer Versicherungskammer.

Commerz Real's Timo Werner, who manages the division's fund that holds a 6% stake in M31, said the group felt "very comfortable" with its investment and that networks were an important part of its strategy.

Versicherungskammer said it intended to remain a long-term investor in M31.

Swiss Life, Talanx and MEAG all declined to comment.

The remaining 25.1% in Amprion is owned by RWE Alkaios Holding, a joint venture formed last year after German utility RWE RWEG.DE sold part of its Amprion stake to Apollo Global Management APO.N.

The German division of Dutch grid operator TenneT has already seen a major ownership shakeup, with a consortium including sovereign wealth fund Norges buying 46% last year and the German government agreeing to take a blocking minority stake this month.

($1 = 0.8422 euros)