ABB pain continues
Jürgen Dormann, CEO of ABB, has been forced to revise down the company’s growth targets for the second time since his appointment in September. ABB now expects growth of four per cent in the period 2002-2005, down from six per cent. Dormann said that no improvement in demand was anticipated within the next 12 to 18 months.
ABB is undergoing a $1.3bn cost reduction programme that will involve 10 000-40 000 job cuts out of a worldwide work force of 146 000. The restructuring has included reducing the size of ABB’s executive board, which for the first time contains no Swedes, and the appointment of two ABB veterans to head core businesses of the slimmed down group. Dinesh Paliwal is be responsible for Automation Technologies and Peter Smits will lead ABB’s new Power Technologies division.
Mounting asbestos-related liabilities have forced US subsidiary Combustion Engineering into Chapter 11 bankruptcy with ABB expecting to require a $300m provision for asbestos costs on top of the $812m assets of Combustion Engineering.
Agreement over a $1.5bn banking facility and optimism that ABB has contained the asbestos liabilities has seen some recovery in share price and a move by Sweden’s Wallenberg family to double its stake in ABB.
Superconductor consumes Danish HTS rival
American Superconductor Corp. has acquired the assets of Nordic Superconductor Technologies A/S (NST), a subsidiary of Denmark’s NKT Holding A/S. NKT will receive 546000 American Superconductor shares valued at $2.1m, which it must hold for a minimum of two years.
NST has developed and marketed high temperature superconductor (HTS) wire to customers in Europe, Asia and North America. American Superconductor will acquire substantially all of the assets including patents, manufacturing equipment, stock materials, work-in-progress and know-how but will not assume any debt or liabilities. NST’s wire manufacturing in Denmark will be shut down and the purchased assets will be incorporated into American Superconductor’s operations.
“This acquisition provides us with some very valuable assets as well as the opportunity to expand our customer base,” said Greg Yurek, chief executive officer of American Superconductor.
GE Power Systems swallows Jenbacher
GE Power Systems is to acquire the Austrian reciprocating engine and genset manufacturer Jenbacher, it was announced in November. GE paid cash to a group of major shareholders and will make an public offer at g17.43 ($17.27) per share for the remaining shares.
Jenbacher is a recognized innovator in cogeneration and the utilization of biogas and waste gases with 1250 employees worldwide generating sales of g249m last year. Jenbacher’s operations are to be integrated with GE Distributed Power broadening its worldwide range of products and services in the areas of clean energy and industrial applications. Since 1999, GE Power Systems has operated as sole distributor for Jenbacher in the Americas for natural gas engines, gensets and cogeneration systems.
GE Power Systems also announced it is to merge Osmonics Inc., a water purification and filtration system manufacturer into its GE Water subsidiary, following a stock and cash offer for the US firm.
The offer is subject to the approval of Osmonics Inc.’s shareholders.
Power pact announced
Two US businesses specializing in the development and manufacturer of proton exchange membrane (PEM) fuel cells, Plug Power Inc. and H Power Corp., have agreed a merger through a stock-for-stock swap, which values H Power at approximately $50.7m.
The combined entity will have 83 issue patents and 163 pending applications worldwide. In a joint statement the firms said the move would better position them to develop the market in stationary PEM fuel cells. “We believe that this transaction will create a stronger and better capitalized company that will immediately benefit from greater financial strength, intellectual property and technical resources,” said Dr. Roger Saillant, president and CEO of Plug Power.
Cantor Fitzgerald expands environmental brokerage service
Cantor Fitzgerald has begun marketing a “seamless environmental brokerage service” offering access to over 34 US environmental markets plus greenhouse gas and renewable energy markets worldwide through its Environmental Services and CO2e subsidiaries.
Greenhouse gas trading opportunities are to be offered through Environmental Services’ US offices and NOx allowance brokerage through CO2e’s offices in Toronto, London and Tokyo. CO2e currently services the US market from Canada.
“Traders are increasingly responsible for managing both their firm’s emissions credit strategies and greenhouse gas portfolio,” said Cantor’s Environmental Brokerage unit.
ABB sale OK: The sale of ABB’s Structured Finance business to GE Commercial Finance for $2.3bn has been granted both US and European Commission approval. The sale is part of ABB’s debt reduction programme and a new emphasis on power and automation technology.
Alstom launches switchgear: Alstom has launched PIX, a flexible range of medium voltage air-insulated switchgear suitable for a wide variety of applications for configurations between 3 kV and 25 kV.
Dynegy difficulties: A “difficult quarter” for Dynegy has resulted in the US energy group reporting a $1.8bn loss in the third quarter 2002 including a $908m goodwill write-off from its Wholesale Energy Network.
Esscor/GE interface: Esscor and GE Industrial Systems have agreed to develop a dynamic simulation solution for turbine-generator processes and controls that GE supplies and services.
Mitsubishi Heavy Industries venture: Nihon Keizai Shibun, Chubu Electric Power and Mitsubishi Heavy Industries are to establish a joint venture to lease fuel cell-based power sources.
Plug connected: Connected Energy Corp. and Plug Power Inc. have signed an agreement to provide Plug Power customers with a web-based system for centrally managing Plug Power GenSys fuel cells.
ScottishPower stronger: Better than expected half year profits from ScottishPower, buoyed by a strong performance from its US unit PacifiCorp, means that the utility may not be in such a need of a merger than its rival Scottish & Southern Energy, say analysts at Datamonitor.
Technip-Coflexip creates power: Following a number of acquisitions, French EPC contractor Technip-Coflexip has established a new independent business unit entitled “Power” in which it has grouped its power generating plant activities.
Tepco slides: Japan’s largest power utility has reported first half profits down 11.9 per cent due to a fall in demand and lower electricity prices. Full year results may be impacted by the shutdown of nuclear facilities caused by a safety records scandal.
Utilyx extends: UK on-line energy broker Utilyx has launched a new range of services including strategic advice and consultancy in addition to the B2B online energy auction procurement package it began in 1999.
Wade surveys: A report by the World Alliance for Decentralized Energy (Wade) says that decentralized power accounts for just seven per cent of global generation and that growth is constrained by barriers to efficiency in most countries.