HomeCoal FiredDifficulty in offloading lignite assets may force Vattenfall re-think

Difficulty in offloading lignite assets may force Vattenfall re-think

Swedish utility Vattenfall may have to change tactics in order to successfully sell its German lignite coal-fired power assets.

Low power prices and projected decommissioning costs have turned away potential buyers and respected German business daily Handelsblatt says management may have to reconsider its sale plan.

The sale, launched at the end of 2014, includes roughly 8,100 megawatt (MW) of lignite-fired plants, which generate about 10 per cent of Germany’s total electricity, as well as mining activities.
Magnus Hall of Vattenfall
The deal had been expected to fetch as much as $3.9bn, but some Reuters sources said that evaluation could be close to zero due to present circumstances. The company experienced a $2.31bn annual net loss for 2015, due to impairments on lignite and nuclear power plants.

Swedish state-owned Vattenfall, led by Magnus Hall (right) is also looking into setting up a fund or foundation to take over the business, Handelsblatt said citing documents.

Electricity firm Steag had been linked as a potential interested party but has decided not to make a binding offer, although it could still be involved as an operating manager of such a fund, the newspaper said.

Other potential buyers included Czech power producer CEZ (CEZP.PR), a consortium of energy group EPH and financial group PPF, and privately-held Czech Coal’s lignite miner Vrsanska Uhelna.

Vattenfall has said it plans to make a final decision on the sale during the first half of 2016.

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