Dalkia, International Power ponder sale of Czech operations

By bne IntelliNews May 4, 2009

Nicholas Watson in Prague -

Official documents are doing the rounds that show the UK's International Power and France's Dalkia are putting out feelers to find buyers for their energy assets in the Czech Republic, bne has learnt from sources who have seen the documents.

International Power, which owns the 585-megawatt (MW) Opatovice power station in the Czech Republic refused to comment on the existence of any documents relating to a sale, and a spokeswoman denied the group's finances could be behind the reason for any sale. "The financial position of the group remains strong, with good corporate liquidity and no material refinancings in 2009. We expect to continue to deliver strong free cash flow in 2009," the spokeswoman quoted a statement from the firm that accompanied its 2008 results, which saw earnings rise 20% from the year before.

Indeed, International Power noted in the release that profits in 2008 from its operations in Czech Republic increased as the business benefited from rising power prices. "During 2008, Czech power prices continued to follow German prices, which were driven up by strong prices for coal, oil and gas. In addition, reported profits benefited from a significant strengthening of the Czech koruna."

Dalkia, a subsidiary of Veolia Environnement and Electricite de France that provides energy services to local authorities and businesses, could not be reached for comment on whether it's looking to sell its extensive interests in the Czech Republic, which include a 90% stake in the combined heat and power plant and primary heating network for the city of Kolin that it bought in January 2007.

However, on May 3, the Sunday Telegraph reported sources as saying that Dalkia is looking to sell of some of its UK operations and PricewaterhouseCoopers has been appointed to review its options, specifically the sale of its infrastructure unit, which designs, builds and installs combined heat and power plants.


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