Babcock Borsig AG negotiations break down
A bid by the German government to rescue engineering company Babcock Borsig AG failed in July after talks with lenders broke down. The holding company and its subsidiaries – which include Babcock Borsig Power, BBP Energy and NEM – now face insolvency.
A breakup of the 111-year old company looks likely. Babcock’s main lenders and the government tried to agree on a rescue deal but the banks, already exposed to several high-profile industrial collapses in Germany, would not give their backing.
Babcock Borsig has been undergoing restructuring for several months in a bid to improve its operations. It was planning to dispose of non-core assets and had already sold wind turbine subsidiary Nordex AG and half of its stake in shipyard subsidiary HDW, its most profitable asset.
The proposed rescue deal comprised a €200m capital increase, over €500m in new loans and the implementation of a radical restructuring plan. The company employs some 22 000 people.
Dynegy fights off poor credit
Embattled US energy firm Dynegy is to take further measures to shore up its business and improve its financial position, and has also announced an adjustment in its estimated second quarter pre-tax charge from $450m to $500m.
Dynegy announced in June a plan to enhance its liquidity position by $2bn to strengthen its balance sheet and improve its credit profile. The move is the second in six months in response to financial concerns following the collapse of Enron and revelations about trading practices in the US energy market.
Dynegy also said that its second quarter pre-tax charge would be $50m higher than expected due to the discovery of inconsistent accounting in its natural gas marketing business and expenses associated with workforce reduction.
The company is one of several in the US under investigation by the Federal Energy Regulatory Commission and the Securities and Exchange Commission for trading and accounting practices. Earlier in June the company said that it had halted trading on its Dynegydirect online system due to the poor credit environment in the energy industry.
GE strengthens UPS line
GE Industrial Systems has signed an agreement to purchase EuroDiesel, a manufacturer of uninterruptible power supply (UPS) systems, from SeghersGroup. The business will become part of GE Digital, a supplier of power quality products and services.
EuroDiesel engineers, manufactures and installs rotary UPS systems and other power quality equipment for critical applications. As part of the deal, GE will acquire the No-Break KS rotary UPS family, a system which comprises a diesel engine, an electromagnetic clutch, and the Stato-Alternator KS.
“EuroDiesel supports our aggressive growth strategy, allowing us to offer an even more complete line of power quality products,” said Lloyd G. Trotter, president and CEO of GE Industrial Systems.
Coen expands in Latin America
Combustion systems manufacturer Coen Company has expanded its operational base through the acquisition of Sistemas en Combustion SA de CV, a supplier of combustion technology and controls to the Mexican industrial and utility markets.
Terms of the deal were not disclosed. The acquisition will improve Coen’s ability to meet its customers’ demands for emission reduction, boiler controls, flame detectors, combustion upgrades and burner management systems.
“The acquisition of Sistemas en Combustion will greatly expand Coen’s capabilities in the Latin American markets,” commented James White, president and CEO of Coen Company. “Sistemas en Combustion’s performance-improving products will complement Coen’s existing product offerings to our customers in Latin America.”
Sistemas en Combustion was previously a joint venture between Coen and Hermes, and is headquartered in Mexico City. Its main clients include utility companies, large industrial operations, independent power producers and OEM boiler manufacturers.
Radioactive joint venture teams up
Westinghouse Government Environmental Services Company, a subsidiary of Washington Group International, has signed a joint venture with Studsvik to offer a technology that could cut the cost and time needed to treat radioactive waste.
The venture will create Thor Treatment Technologies, which will capitalize on Studsvik’s Thor Pyrolysis/steam reform technology, offering it to the US Department of Energy.
Aumund takeover: Bulk materials handling company Aumund has announced that it has acquired B&W Mechanical Handling Ltd of the UK following a 12-month strategic alliance between the two groups. B&W’s mobile loading station and Samson Feeder are an ideal addition to Aumund’s product range, the company said in a statement.
CMS reigns in costs: US energy company CMS Energy has announced a series of steps to sharpen its business focus, strengthen cash flow and improve its balance sheet. It has identified new assets to be sold, will restructure its energy marketing unit and will revise its operating earnings outlook for 2002 to reflect decreased energy trading activities.
DCH Technology hits trouble: PEM fuel cell developer DCH Technology has temporarily laid off most of its employees due to problems with cash flow. The US-based company said that the difficult business and financial climate of the past year had disrupted interim financing leading to a difficult cash flow position.
FLS Milj restructures: FLS Milj ‘s global air pollution control business, APC, has been transferred to F.L.Smidth Group as part of the company’s ongoing restructuring. The transfer of APC, which has an annual turnover of $125m, will provide the company with a stronger platform from which to operate.
Fuji fuel cell progress: Fuji Electric has met key performance targets in its plan to develop proton exchange membrane fuel cells for residential applications. The company has operated a prototype unit fuelled by natural gas for more than 10 000 hours following work on improving cell decay rates.
GE, Hertz join up: GE Energy Rentals and Hertz Equipment Rental Corporation are to team up to provide North American customers with a single source for renting equipment. Under the non-exclusive agreement, GE’s power and climate control equipment will be available at several Hertz facilities in the US.
Raytheon losses: US defence and aerospace group Raytheon has said that its losses from two power plant projects in Massachusetts would exceed $1.2bn, or 50 per cent more than expected. Miscalculated costs, declining productivity and delays were to blame for the problems, the company said.
Shell launches project: Shell has signed an agreement with Aker Kvaerner and Statkraft to explore possible large-scale applications of new solid oxide fuel cell technology driven by natural gas. The companies are aiming to become the first in the world to commercialize large-scale multi-megawatt fuel cells of this type.