Companies – World News

Alstom faces uncertain future after Monti decision

Alstom suspended trading in its shares and convened a board meeting in mid-September after the European Commission announced that it would block a refinancing plan that would have secured the company’s future. As PEi went to press, the company released a statement saying that it would continue to seek a solution to address its financial problems.

The Commission announced on 17 September that it would, in principle, prohibit the French State from becoming a shareholder in Alstom and providing the company with a long term loan. It said that it would also open an in-depth inquiry into the rescue deal agreed between Alstom, its banks and the French government.

Both Alstom and the French government have said that the group faces collapse unless it receives an injection of cash by the end of September. The European Competition Commission ” headed by Mario Monti ” is opposed to such subsidies, however, and analysts are concerned that there is little room for compromise.

Alstom’s banks are keen to see the French government’s participation in Alstom’s rescue. In early August, the parties reached a deal in which the French state would invest g600m in shares and loans in Alstom.

News digest

ABB bond: Engineering group ABB has launched a $1.2bn convertible bond, the proceeds of which will be used to refinance a $750m bank credit facility. The issue is a sign that the company is making its way back to financial health.

Capstone interrupts: Capstone Turbine Corporation has temporarily interrupted production of certain products after it identified quality issues in some components. It does not expect backlog or new orders to be affected, although third quarter results may be impacted.

Duke settles: Duke Energy Corp. has agreed to pay $28m to settle charges that it attempted to manipulate energy markets by giving fake prices to publishers of natural gas prices. The Commodity Futures Trading Commission in the US found that Duke reported trades that did not occur and reported certain trades at false prices and/or volumes.

EXAA sign-up: Three companies signed up to trade on Austria’s EXAA power exchange in September, taking the total number of participants to 25. Energy Financing Team Ltd. of the UK, Slovenia’s Slovenske Elektrarne and Union Fenosa of Spain are the new members.

International Power reports: International Power has reported a profit before interest and tax of à‚£138m ($223m) for the first half of the year. Challenging market conditions in the US and the UK were countered by a robust performance in parts of Europe and the Middle East.

ML execs charged: Three former Merrill Lynch & Co. executives have been charged in the US federal court with fraud in connection with an Enron deal for power plant barges in Nigeria. The three were charged with falsifying records and conspiracy to commit wire fraud. One was also accused of lying to a grand jury investigating the Enron scandal.

PG&E rename: PG&E Corp is planning to change the name of its bankrupt wholesale energy unit, National Energy Group, to National Energy & Gas Transmission Inc. The move reflects the unit’s pending separation from its parent company.

RWE-MTU get go-ahead: The European Commission has approved a proposed joint venture between RWE and DaimlerChrysler’s MTU to develop, produce and sell fuel cells. MTU will bring its products and technology to the venture while RWE will provide market access.

Tyco buys: US company Tyco has purchased the fireproof power cable operation of a private Chinese firm for $10m. The Jiuli Group, based in east China’s Zhejiang Province, is China’s largest producer of fireproof power cables. Tyco hopes to expand the company’s operations.

FPL buys AmerGen stake

FPL Group has agreed to buy British Energy’s 50 per cent stake in AmerGen Energy Co., which owns and operates nuclear power plants in the USA. The deal brings British Energy a step closer to meeting the requirements of a government-backed rescue package.

Florida-based FPL has offered $276.5m for British Energy’s share in AmerGen, which owns and operates 2480 MW of nuclear capacity. Exelon Corp. owns the remaining 50 per cent of AmerGen, and has a 30-day right of refusal on the deal.

The sale of its share in AmerGen was a vital requirement of a à‚£5bn ($8bn) rescue package for British Energy, which supplies more than 20 per cent of Britain’s electricity. The company still has to reach agreement with banks and bondholders which earlier this year agreed to swap loans for a mixture of British Energy shares and bonds.

AmerGen owns and operates the Clinton power station in Illinois, Unit 1 at Three Mile Island and the Oyster Creek plant in New Jersey.

Wärtsilä shifts core focus

Finnish engine manufacturer Wärtsilä has announced that it is to concentrate on its marine and service divisions, and will adapt its power plant business to reflect current market conditions. The decision is a result of a business analysis launched in July 2003 and is designed to improve the company’s profit generating ability.

Wärtsilä’s Power Division order book currently stands at around g1500m, 14 per cent higher than one year ago. However, volatile demand in the market and an excess capacity mean that it will reduce the range of its product offerings and also reduce employee numbers.

In its present form the high-speed engine business has not met Wärtsilä’s expectations, and the company will discontinue the production of the Wärtsilä 200 and 220SG engines in Mulhouse, France. The manufacturing of special products will continue in Surgàƒ¨res.

Wärtsilä France will be stepped up as a service company and will continue to provide service for the customers of the high-speed engines. Wärtsilä has secured significant power plant orders in recent weeks. The company expects to reach its target operating margin of 7-8 per cent by the end of 2005.

Aquila sells Canadian units

US utility Aquila Inc. is to sell its Canadian retail assets to Fortis Inc. for $990m in a bid to cut debt. The move marks an end to the company’s 16-year presence in the Canadian power market.

Fortis is to buy Aquila’s rural electricity distribution businesses in Alberta and British Colombia, which serve a total of 520 000 customers. The sale is in line with Aquila’s desire to focus on the regulated US electricity market.

The deal gives Fortis a presence in western Canada and will double its customer base. It already has power generation operations in Newfoundland.

Clean Air name change

Clean Air Partners has changed its name to Clean Air Power to reflect its core focus ” the delivery of clean power technology for the power generation and related markets.

The company recently raised $30m of financing, brought in a new management team and is implementing an internal reorganization. It believes this will improve its ability to provide its dual fuel technology and after treatment products to the distributed generation market.

“Thinking beyond the vehicle market in North America has opened up major opportunities for Clean Air Power,” said CEO Dan Kabel.

No posts to display