German utility E.ON AG (EOAN.XE) Thursday defended its push into emerging markets outside Europe to tap high energy demand growth, as shareholders voiced criticism of the plans and called on the company to conserve cash after huge write-downs on the European assets acquired in recent years.

"One gets the impression that E.ON earns money in Germany to burn it abroad," said Ingo Speich, portfolio manager at investment fund company Union Investment, at E.ON's annual general meeting. "Your plans in Brazil appear to be too daring," Speich added.

Christoph Ohme, senior portfolio manager at Deutsche Bank AG's (DB) investment fund unit DWS Investment, also warned E.ON not to overpay for its expansion.

Ohme and other shareholders pointed to the massive impairment charges the company had to book on assets it acquired in Italy, Spain and France in recent years.

The assets were acquired for more than EUR10 billion, but E.ON had to write-down nearly half of their value, attributing this to changes in regulation as well as deteriorated economic prospects.

"In our view, E.ON should clearly define the next steps of its international expansion," said Ohme.

However, E.ON Chief Executive Johannes Teyssen insisted that the strategy to expand into emerging countries is correct, because those markets offer much higher growth rates than saturated European markets.

The comments come after E.ON earlier this year announced plans to form a joint venture with Brazilian energy company MPX Energia SA (MPXE3.BR), with the aim of developing 11 gigawatt of power generation capacity in Brazil and Chile.

E.ON had previously singled out Brazil, Turkey and India as potentially attractive growth markets and Teyssen Thursday added that the company is in "promising talks" with partners in Turkey and India over possible partnerships.

Teyssen continued that investment in Brazil will remain fairly limited as most of the planned projects will be majority-financed via debt.

"To the end of this decade, we expect investment in the low single-digit billion euro range in Brazil, or EUR100 million to EUR200 million per year," Teyssen said.

He also said the partnership with MPX gives E.ON access to gas and coal that the companies can use to fuel their power plants. "Not many players in the Brazilian energy market have that sort of access to fuels," he said.

MPX is a unit of a broader industrial conglomerate, owned by Brazil's richest man, Eike Batista. Other operations of Batista's empire of companies include coal mining and gas production companies.

-By Jan Hromadko, Dow Jones Newswires; +49 69 29 725 503; jan.hromadko@dowjones.com

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