By Christoph Steitz
ESSEN, Germany (Reuters) - RWE (DE:RWEG) Chief Executive Peter Terium offered little hope for a fast turnaround of Germany's largest power producer, warning that government plans for a coal levy would pose a threat to the company.
Germany's utilities have seen their profits and share prices tumble as they grapple with a restructuring of the energy sector that has promoted solar and wind generation at the expense of their gas-fired power stations.
"The crisis is far from over," the 51-year Dutchman told shareholders at the group's annual general meeting on Thursday.
"Times will get even harder."
Terium warned that a coal levy, proposed by Germany's Energy Minister Sigmar Gabriel to lower the country's CO2 emissions, would lead to the immediate closure of the majority of the group's lignite-fired plants.
"These plans would lead, in the short term, to a disorganised, rushed exit from lignite-based electricity production," Terium said.
Lignite is RWE's most important energy source, accounting for about 37 percent of its power generation last year.
As a result of the energy industry's crisis, the price of RWE shares has slumped by more than three quarters since 2007, destroying nearly 40 billion euros (28.59 billion pounds) in market value.
Having accumulated a 31 billion euro debt pile during the industry's heyday, RWE has worked hard to reduce its leverage, shedding assets such as its oil and gas unit DEA as well as talking with outside investors about potential cooperations.
The crisis has also triggered fears over whether Germany's utilities will be able to survive the fundamental shift that is taking place in the power sector, concerns that Terium said were unfounded.
"RWE is not at risk of becoming insolvent in the short term, despite a high debt level," Terium said.
The 117-year old utility, which supplies 16 million customers with electricity, said in March it was talking to an unnamed Gulf investor, raising hopes it may end up with fresh equities and gain a foothold in new markets.
Terium confirmed that discussions were currently ongoing, adding no deal had been signed, except a confidentiality agreement.