Powerline will be hived off to its PPC participation - MAnet will concentrate on providing value-added telecommunications services for key accounts - Dr. Rudolf Schulten: "First and financially biggest step in focussing on the company's core business"

MVV Energie in Mannheim, an energy-distribution utility and value-added services provider, has streamlined its telecommunications business in an initial step of its pending restructuring and focusing on its core business in order to get it into the black. As MVV Energie's CEO Dr. Rudolf Schulten emphasised after a meeting of MVV Energie's Supervisory Board in Mannheim on Wednesday, all of the Company' Dr. Rudolf Schulten: "First and financially biggest step in focussing on the company`s core business activities in conjunction with Powerline technology will be bundled in, and economically managed by, Power PLUS Communications AG (PPC).

PPC has been responsible for marketing this technology, with which power grids can be used for data transmission and hence for Internet access, to other electric power utilities with their own grids in Germany and Austria. In addition to MVV Energie via its venture capital company, MVV Innovationsportfolio, ABB AG and Israeli technology partner Main.net also hold participations in PPC. Dr. Rudolf Schulten: "With such a powerful team, Powerline will be managed even more efficiently in Mannheim and we'll be better able to take advantage of PPC's synergies. For PPC it will also open up an opportunity to continue offering services to other cities well beyond Mannheim."

MVV Energie's subsidiary MAnet GmbH, which has conducted business with the "Internet from the wall socket" in Mannheim until now, will concentrate its efforts on providing promising value-added telecommunications services for the key-accounts segment. Dr. Rudolf Schulten: "In recent years, we have created an unusually competitive data-transmission infrastructure with our forward-looking investments in Mannheim's fibre-optic grid, particularly in comparison to the rest of Europe. In the past, MAnet has had positive results in this sector. We now intend to utilise the potential of this growth segment even more consistently."

This restructuring will be made possible by means of adjustments in the value of fixed assets, write-offs of the full book value of participations and full retirement of MAnet's debt by the MVV Energie Group. For this reason, the Company will have to spend up to Euro 31 million, in the words of its CEO. Dr. Rudolf Schulten: "With such a clear move, this segment will be pointed towards profitability and will be put on solid ground." During the last fiscal year, the MVV Energie Group had to absorb a negative result of approx. Euro 7 million in the telecommunications sector.

With this decision, the Supervisory Board has made "the first step in strategically focussing on MVV Energie's core business - and at the same time the biggest step concerning the financial burden", the CEO says. According to Dr. Rudolf Schulten, all areas of business are being checked for their recoverability at present. In the following process of clearing out the portfolio further one-off costs will accrue which will strain the company's results this fiscal year. "In the second step, which is to follow in the near future, other non-core business areas such as wind power, waste water, consulting and project development as well as activities in Spain and Portugal will be dealt with. The financial burden for this second part of our clearing process will be less than that for the part decided on now.

MVV Energie's CEO is convinced that Powerline can be profitably operated on the market with a more streamlined organisation in Mannheim and under the management of local municipal utilities throughout Germany. This new technology has in the meantime overcome its "childhood ailments" and has gained a respectable market share in its first appearance on the market in Mannheim under the product name "Vype". Dr. Rudolf Schulten: "After the euphoric planning at the beginning, we have now prepared a new business plan that will ensure Vype a secure place on Mannheim's Internet market." The new generation of modems has successfully passed initial tests and could open attractive prospects for the future for Powerline. "Decisions on additional investments will then be made by PPC and will be financed by capital from new investors," Dr. Schulten added.

The European Commission recently emphasised the strategic importance of Powerline technology for the development of broadband service in Europe. The EU has been promoting international Powerline activities with approx. Euro 9 million in its "OPERA Project - Open Powerline European Research Alliance" - which includes Italy's ENEL, France's EDF, Spain's Endesa and Iberdrola as well as Austria's Linz AG in addition to MVV Energie. PPC has assumed a leading role in this project.

With this restructuring of its telecommunications activities, a basis will be formed for successfully marketing Powerline technology to other municipal utilities and power-grid operators via PPC, according to Dr. Schulten: "In addition to Mannheim, our Powerline technology has already been commercially installed in Hamelin, Dresden, Haßfurt and Linz. Our Powerline activities will be bundled by virtue of this restructuring. This will also facilitate acquisition of participations in PPC by other enterprises in future."

MVV Energie's CEO is also expecting positive developments from the Company's MAnet subsidiary. "Providing value-added telecommunications services for key accounts represents an important growth market, on which MAnet should focus its efforts in future," declared Dr. Schulten. He sees a promising potential for these services just in Mannheim's dynamic industrial and commercial zones and is counting on a market share of approx. 25 percent in the connected zones on a medium-term basis.

Dr. Rudolf Schulten: "With products and services that are tailored to customer needs, we can and will also hold our own on the market in the telecommunications sector, thereby making effective use of our existing electric power and fibre-optic grids."

Mannheim, March 10, 2004