Alstom sells thermal power equipment unit for $1bn

Alstomà‚  has agreed to sell its steam auxiliary components unit to investment firm Triton for about $1bn as it continues to rationalise its business

The power equipment unit, which makes air preheaters and gas-gas heaters for thermal power plants, heat transfer technology for petrochemical and industrial processes, and grinding mills, generated about $593m in revenue and a “double-digit” operating margin in the fiscal year ended yesterday, the company said today in a statement.
Chief Executive Officer Patrick Kron outlined plans in November to cut costs and sell as much as 2 billion euros in assets by the end of 2014 to curb debt and regain “strategic mobility.” Alstom is responding to slowing demand for power plants and price pressure that’s hurting profit from onshore wind turbines and power-transmission gear.

Alstom Alstom (Euronext:à‚ ALO), which reduced its workforce in Europe and the U.S. as utilities’ demand for power equipment slumped after the 2009 recession, is cutting 1,300 jobs, mainly at its information-technology department and the boiler unit, to reduce costs by as much as 1.5 billion euros by April 2016.

The French company is pushing for savings in Europe while investing in partnerships and plants in countries such as China, Russia, Brazil, India and South Africa to tap local demand for trains and turbines.

Meanwhile Alstom has also won a $551m contract from Eni Iraq to construct the 740 MW Zubair gas-fired power plant near Basra in southern Iraq.

The company will be responsible for engineering, building and commissioning the plant, as well the supply of key equipment, most notably four highly reliable GT13E2 gas turbines.

The plant is expected to support the expansion of the Zubair oil field near Basra.

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