ABB to settle on asbestos claims
Swiss based engineering group ABB has reached agreement on a reorganization of two of its subsidiaries, which would resolve outstanding asbestos claims on both companies but which will involve setting aside an additional $232m.
ABB’s financial position has been undermined for a number of years due to the unquantifiable nature of the liabilities arising from asbestos within the group. The agreement aims to lift the uncertainty overhanging the company.
Under the terms of the agreement, ABB will contribute an additional fixed amount of $232m to a trust fund. This contribution will either be derived from the sale of ABB Lummus Global assets within two years of the plan’s effective date or by a direct contribution from ABB.
Siemens extends deal
Siemens AG has extended and expanded its research agreement with the Helmholtz Association of National Research Centres in an effort to develop new technologies. Helmholtz is Germany’s largest research institution.
Norbert Koenig, member of the group executive management of Siemens, said at the contract signing, “The ability to implement innovative technologies will be the decisive factor in the future for the successful companies and economies.”
The new expanded agreement between the two partners will focus on the development of superconductors, fuel cells and membranes, the aerodynamics of turbo machinery, gas turbine combustion technology, material systems for power plant components and CO2 free power plant technologies.
Electrabel finds foreign form
Electrabel sold over half of its electricity outside Belgium for the first time last year as it increased electricity sales by 5.7 per cent to 145.1 TWh. Income on sales rose 12 per cent to €12.1bn ($15.6bn).
Despite increasing electricity exports to 51 per cent, profits fell 6.2 per cent to €945m. The downturn was blamed on a loss of €74m because of the company’s commitments in dismantling nuclear reactors and the management of nuclear waste.
In an effort to enhance the encouraging performance generated from electricity exports, Electrabel has now acquired 40 per cent of the French Midi hydroelectric company, SHEM, from French railway operator SNCF.
The group has said it will pursue its foreign sales strategy to achieve a target of 200 TWh by 2009. Electrabel achieved 56 per cent of total sales in the Benelux region compared with 13 per cent for eastern Europe and nine per cent in France, Italy and Spain.
Calpine borrows $503m for new energy centres
Five banks have agreed to loan Calpine Corporation the necessary $503m to complete the construction of two new energy centres in the USA.
The two projects were seen by Calpine as the next step on the route to becoming a vertically integrated energy company. Calpine vice president, Finance, Brian Harenza, said: “This marks the first time that Calpine’s strategy of managing every aspect of a power plant, from development and construction to operations and maintenance, has been financed in the broader commercial bank market.”
Calpine had initially received around $97m for the construction costs already spent on the 375 MW Mankato Energy Centre in Blue Earth County, Minnesota, and the 250 MW Freeport Energy Centre in Freeport, Texas. The remaining amount will be used to fund the completion.
PWPA signed for Ras Laffan B
Project partners International Power, Qatar Electricity and Water Corporation and Chubu Electric of Japan have signed a 25 year Power and Water Purchase Agreement for the entire power and water output from Ras Laffan B in Qatar.
The total cost of the project is expected to be $900m, which will be funded by a mix of debt and equity in a 20 per cent ratio.
The combined cycle gas turbine project will produce 1025 MW of power and 60 MIGD of water on completion. The first phase is expected to be operational in 2006, with full commercial operation in 2008.
VA Tech returns mixed financial results
After a year of restructuring, takeover speculation and sizeable orders, VA Tech’s financial results for 2004 were as diverse as expected.
While the company saw sales rise by six per cent to €4bn ($5.1bn), the group lost €67.8m. However the company stressed that, excluding one-off effects, profits for 2004 would have been double the previous year’s return at €32.7m.
The company underwent rigorous resizing measures in the transformer production field, closing its loss making transformer plant in Edinburgh, Scotland and agreeing to major restructuring for the Ferranti-Packard plant in St. Catherines, Canada.
Last year saw the company the subject of much ownership speculation. In September, the international investors Goldman Sachs and Fidelity bought 5.16 per cent and 5.2 per cent of its shares, respectively. Siemens bought a 16.45 per cent stake from Victory Industriebeteiligung before it made a takeover bid for 100 per cent of the company’s shares in December.
Babcock good cop: UK based Mitsui Babcock has strengthened its position in the North American market with a four contract win with Alliant Energy worth $5.6m. The four contracts cover a variety of projects ranging from reheater replacement to installing an overfire air system.
Czech mate: RWE’s attempt to acquire a majority interest in Czech power distribution enterprises and heating plants has been rejected by the Czech competition office, which said it would not relax conditions until the privatization process has been completed.
Elsam return: The Danish utility has recorded a net profit of DKK2bn ($346.7m) made through a DKK1.8bn increase in turnover. The board has recommended a dividend of DKK22.50 per share.
EnBW Turnaround: The south German energy group EnBW saw a return to profit in the end of year results for 2004. Net earnings were €308.1m ($398m) compared with a €1.1bn loss the previous year.
Eon and on: Eon AG has increased its dividend to shareholders after posting a rise in pre-tax profits. The financial results for 2004 saw the level rise from €6.2bn ($8bn) in 2003 to €7.3bn. The company expects higher electricity prices to generate further growth in 2005.
Fresh and green: A wind turbine design that has been twenty years in development and combines increased efficiency with aesthetically pleasing qualities has been declared ready for commercial production by McKenzie Bay.
Going Dutch: The Japan Bank for International Co-operation is to loan $100m to CBK Netherlands Holdings to support its power project in the Laguna province of the Philippines.
Indian investment: Skoda’s plans to invest $14m in India over the next five years have begun with the opening of an office that will concentrate its activities on supplies, modernization and services to power units.
New advisor: A new company has been created by the Econ group. Based in Paris, Econ Energia will offer clients detailed market and competitive advisory services in energy, environment and related industries.
Sachs purchase: Goldman Sachs has announced it will acquire Zilkha Renewable Energy for an undisclosed sum. Zilkha is a privately held Houston based wind energy development firm with a portfolio of nearly 4000 MW in various stages of development in a dozen states.
Volume up: Vattenfall has increased its net profit by almost 30 per cent to SEK11bn ($1.5bn) aided by increased electricity generation volumes and positive hedging outcomes. A much improved performance in Poland also contributed.