ABB passes dividend on $691m loss in 2001
ABB, the international electrical engineering giant, highlighted its stretched financial condition by passing its dividend after announcing a larger than expected loss of $691m in 2001.
The year 2000 saw the company turnover $1.44bn, which was wiped out the following year after taking a $470m charge to double the size of its provisions against asbestos insurance claims.
Jorgen Centerman, who took over as ABB’s chief executive at the start of 2001, said that after a review of operations,”we took broad measures … to turn the page and put ABB on better footing”.
The company, which has shed 7200 of the planned 12 000 job cuts announced last summer, said that it now expected the margin on its earnings before interest and tax to increase from 1.2 per cent in 2001 to between 4-5 per cent this year.
Meanwhile, the ABB board announced that it is reassessing the pension and other benefits received by its former chief executive officers, Percy Barnevik and Göran Lindahl. The board said that Barnevik had received some CHF85m ($50m, €57.6m) in pension benefits after his resignation as CEO in 1996, while Lindahl’s pension and other benefits amount to some CHF85m.
Jurgen Dormann, chairman of ABB, said:”These benefits were made available under the assumption of proper corporate approvals by the board of directors or on the basis of board delegation. The board has now determined that approval procedures for these benefits were unsatisfactory.”
The company is to seek repayment of amounts paid in excess of obligations.
EnBW delays initial public offering
German electricity player Energie Baden Wuerttemberg to postpone its public share offering that was originally scheduled for May, say sources close to the company.
Even though preparations for the launch are near sorted for the drawing-up of a listings prospectus, sources reveal Gerhard Goll, chairman of the company, sees little hope of a successful offering amid current market conditions. They added that the group’s advisors, Deutsche Bank, also recommended a postponement.
The potential C2bn ($1.7bn) deal issue would have been the largest scheduled for the year. A 25 per cent share of the company was to be placed on the market. Goll was said to be reluctant in setting another date, which will force the company to pay back in cash a C490m convertible bond which is due August 31. The group is now considering a bond launch.
GE enters wind market with Enron acquisition
GE Power Systems has announced an agreement to acquire certain assets of Enron Wind Corporation, an Enron subsidiary. The transaction, which is subject to regulatory and bankruptcy approval, is expected to close in April 2002.
John Rice, president of GE Power Systems said:”The acquisition of Enron Wind represents GE Power Systems’ initial investment into renewable and wind power, one of the fastest growing energy sectors.”
The purchase, which is regarded as a major coup for GE, will catapult its renewable business forward by exploring bigger markets. Enron Wind’s advanced technology has played a key role in the development of large turbines for both on-shore and off-shore applications.
Enron Wind, which has manufacturing operations in the US, Germany and Spain, is headquartered in Tehachapi, California.
Alstom teams with Rolls-Royce in technology plan
Alstom and Rolls-Royce announced they have signed a long term technology agreement which will enable Alstom to use Rolls-Royce aeroengine technology in the development of its heavy duty gas turbine product range.
Rolls-Royce engines operate using very high temperature technologies, advanced aerodynamics and very high strength/high temperature materials. The expertise and knowledge in these areas will be transferred to Alstom’s heavy duty gas turbine market.
In return Rolls-Royce will expect technology payment.
Mirant hops out of Europe
Officials at US-based Mirant said it was pulling out of European electricity and gas trading in a bid to prevent potential profit loss.
The company, which late last year had its credit rating reduced by Moody’s to junk bond, is also expected to announce more cutbacks in its US power station capital investment programme after closing its Berlin trading office.
Edison drop: Italy’s energy producer, Edison, has had its credit rating reduced to triple B and A3, respectively from single A minus and A2 status. The long-term ratings remain on credit watch with negative implications.
E.ON collapse: The nuclear energy operations of the German energy group, E.ON, is behind the collapse of the planned hydroelectric sector merger between E.ON and the Austrian Verbund due to a 915 000 signature petition supported by the Czech Republic making the merger politically impossible.
Enron order: A US federal judge asked plaintiffs in a series of lawsuits against Enron to agree to a plan with Andersen to end the shredding of Enron-related documents. Enron sealed off the site where where the former employees said the shredding had taken place since November.
Framatome purchase: the France-based engineering company Framatome has signed an agreement to purchase leading engineering and technical firm, Duke Engineering & Services, a Duke Energy subsidiary.
GE acquisition: GE Power Systems announced it has completed the acquisition of Bently Nevada Corporation, a global leader in machinery monitoring and diagnostics. Bently Nevada had projected sales of nearly $235m last year and is headquartered in Minden, Nevada.
Mirant sell-off: US-based Mirant announced the sale completion of its 44.8 per cent stake in Bewag. The company received more than $1bn in net proceeds after repayment of approximately $600m in debt associated with its Bewag investment.
Powergen stall: The UK’s Powergen has taken its £400m ($573m)-worth combined heat and power business off the market after failing to find a suitable buyer. The introduction of the New Electricity Trading Arrangements last year, which mean that companies face penalties if they produce either too much power or less than they predicted, is also said to be behind the sale decision.
Rolls Wood buy: Rolls Wood Group has acquired the Rolls-Royce Allsion industrial and marine repair and overhaul engine programme from Rolls-Royce Engine Services Oakland of California for some £20m ($28m). The sale gives it the assets of the Rolls-Royce 501K and 570/571 gas turbine product lines.
RWE expansion: Germany’s RWE has its sights on municipal utilities and regional suppliers in central Europe, having set out its gas ambitions by buying a Czech importer, said Heinz-Werner Ufer, head of RWE Plus, the company’s utility arm.