Enel plans diversification
Italian electric utility Enel is planning to further diversify its operations away from electricity over the next four years. It has also revised its return on equity forecast upwards and sees its gross operating profit rising by four per cent per year on average from 2000-2005.
The utility has said that it plans to invest €a8bn in electricity distribution up to 2005 and €2bn in the water business. It recently confirmed its interest in buying Southern Water plc from ScottishPower.
Enel has also confirmed that it is in negotiations over several acquisitions in the gas sector which could add up to 400 000 customers to its supply base. The company is aiming to have two million gas customers by 2005 compared with its current 500 000 customer base.
Enel is in the process of divesting 15 000 MW of generating capacity as part of Italy’s electricity market liberalization plans. These moves have already attracted overseas players to the Italian generating market but the OECD stated recently that Enel should divest a further 11 000 MW if real competition is to be achieved.
Duke targets Europe
US power and gas group Duke Energy will spend up to $1bn in 2001 on bolstering its position in the European electricity market as part of group-wide plans to expand in deregulating power markets.
Duke is one of the largest power generators and energy traders in the USA. It is looking to secure between 1000 MW and 2000 MW of generating capacity, and its first acquisition is likely to be in the UK.
The planned purchases will underpin a strategy to increase is power trading activities across Europe. The company already trades natural gas in the UK, Belgium, Germany and the Netherlands but trades electricity only in Italy.
Duke Energy International president Bruce Williamson said the company is planning to spend between $500m and $1bn in Europe over the next 12 months. It wants to secure at least 500 MW of capacity in the UK by mid-2001.
Tractebel enhances engineering services arm with acquisition
Belgian electricity group Tractebel has launched a friendly takeover bid for GTI, a Dutch engineering company. The move will strengthen the Suez-owned company’s energy services business in the Benelux region.
Tractebel has offered €37 per share in cash, valuing GTI at €330m ($293m). The bid will be finalized in May, and Tractebel will absorb GTI into Fabricom, its services arm.
GTI is a leading provider of electrical installations, management and maintenance services in The Netherlands and employs 9500 people. The takeover will “round out the services and technologies portfolio offered to industry by Tractebel’s large services division”.
Suez is aiming to strengthen its electricity and water business after shelving plans to become a provider of third generation mobile phone services.
Innogy to float Regenesys
UK power group Innogy has confirmed that it will seek an initial public offering (IPO) for its Regenesys business this year. The company had previously suggested that the float would take place in 2002.
Chief operating operator Brian Count said that the IPO could take place in the fourth quarter of 2001, although the exact timing will depend on market conditions.
Regenesys is a patented utility-scale electricity storage technology that can release electricity to compensate for supply shortages or for voltage control. It could change the way in which power systems are managed and could revolutionize power trading.
Credit Suisse First Boston, which is handling the IPO, has valued the business at a minimum of $1.42bn. Innogy could float up to 25 per cent of Regenesys.
The first Regenesys plant is being built in the UK. The Tennessee Valley Authority will also use the technology to reinforce its power system.
ABB supports growth with NYSE listing
Global technology company ABB has listed its shares on the New York Stock Exchange in a move aimed at supporting the company’s growth strategy. It went ahead with the listing in spite of investor concerns over asbestos-related insurance claims.
ABB is particularly keen to strengthen its position in the USA. “We are moving to broaden our shareholder base in the USA,” said president and CEO Jörgen Centerman. “The listing supports our growth ambitions and allows us to better benchmark ourselves against competitors.”
As part of the US share listing, ABB disclosed that it has set aside $430m to cover its exposure to asbestos insurance claims. It said that in 2000, the number of new claims rose by 18 per cent to 39 000 and the average payment per claim rose 20 per cent to $4833. The company believes that it will take 11 years to settle all the claims.
The asbestos claims are related to the acquisition in 1990 of Combustion Engineering, a boiler company that it has since sold.