Press Releases
11/05/2000
Synergen Bid Success
National Power announced today it has successfully bid £13.8million (A$35.6million) for the Synergen business which consists of a total of 359MW of gas and distillate peaking plant near Adelaide, South Australia.
The acquisition of Synergen through a 100 year lease is expected to be completed next month (June) and will be financed from Group funds. It is in line with the company's strategic objective of developing a major platform for growth in the Australian power market.
The deal complements National Power's existing investment in the 500MW Pelican Point combined cycle plant, currently under construction in South Australia and due to commence operations towards the end of 2000. The proximity of Synergen and Pelican Point will allow savings through operational efficiencies.
The South Australian electricity market is currently characterised by a tight supply/demand balance with peak demand forecast to grow at up to 4.5 per cent a year in the near term. Synergen's fast-response turbine generators are ideally suited to covering unexpected breakdowns of major plant elsewhere on the system and so preventing enforced reductions in load.
In the year ended June 1999 Synergen had a turnover of £10.4million (A$26.8million) and earnings of £4.6million (A$11.8 million). The price to be paid for Synergen equates to £40 per kilowatt. Synergen's income has a significant level of contractual protection during the first three years of operation. As part of the deal National Power will incur costs relating to Synergen's reorganisation and transition to the private sector.
Peter Giller, Chief Executive of National Power's International Business, said: "The acquisition strengthens our strategic position in Australia, contributes to shareholder value and is expected to be earnings enhancing from 2001/2002.
"Synergen is an excellent fit for our existing business and is well placed to supply the rapidly growing demand for peaking capacity in South Australia. Together with our Pelican Point plant and our 72 per cent shareholding in the 1600MW Hazelwood station in Victoria, it provides us with an unrivalled diversity of generation capacity in the Australian power market. It will make us the only private sector generator with a combination of base load, mid-merit and peaking plant."
The sale of Synergen is part of the privatisation process undertaken by the South Australian Government which began in September 1999, and is due to be completed at the end of this year. On completion, it is expected that all generation, transmission, retail and distribution assets will be controlled by the private sector.
National Power plans to separate into two independent companies - International Power, an international power business, and Npower, an integrated UK business. Good progress continues to be made in preparations for the proposed demerger in the current financial year.
For further information:
Contact Rick Waghorn, National Power: 01793 893867
Rick.Waghorn@natpower.com
