By Christoph Steitz
ESSEN, Germany (Reuters) - German utility E.ON (DE:EONGn) will shed assets and cut jobs to reduce its debt pile, after impairments on its former power plant unit Uniper (DE:UN01) triggered a 16 billion euro (13.9 billion pounds) net loss, more than its current market value.
CEO Johannes Teyssen is hoping to draw a line under years of losses and address shareholder pressure over his decision to break up the company following a rise in renewable energy and a drop in power prices that has caught it off-guard.
The group's decision to spin off fossil fuel based-plants and energy trading last year and rebrand it Uniper has been less well received than a plan by rival RWE (DE:RWEG) to float its healthy assets - renewables, networks and grids.
"2016 was a transitional year. The impact on our balance sheet marks a turning point and clears E.ON's way into the new energy world," Teyssen said in a statement on Wednesday.
Shares in the group were indicated to open 1.3 percent higher in pre-market trade, at the top of Germany's blue-chip DAX index (GDAXI). Shares in Uniper, in which E.ON still holds 46.65 percent, were seen opening up 0.5 percent.
E.ON said it planned to lower debt to about 20 billion euros over the medium-term, compared with 26.3 billion at the end of 2016, by selling further stakes in Uniper and shifting its stake in the Nord Stream 1 pipeline to a pension fund.
Other measures could include selling off further stakes in Uniper and other non-strategic businesses, E.ON said, also pointing to a scrip dividend as an option and optimising costs for nuclear decommissioning.
E.ON will lower annual costs by 400 million euros by 2018, an effort that will result in 1,300 job cuts, amounting to about 3 percent of its total workforce, it said, adding it also slashed its investment budget by a fifth.
E.ON proposed a dividend of 0.21 euros per share for 2016, in line with the average forecast in a Reuters poll, and said it planned a fixed payout of 0.30 euros per share for 2017.
($1 = 0.9415 euros)