Orkla sells part of its hydropower assets
(Thomson Reuters ONE) - Orkla-owned Elkem is selling its hydropower plants in Salten andBremanger for NOK 6 billion. The total annual power production of thesold plants is 1.7 TWh, of which 1.5 TWh is owned production. Elkem'spower plants in Sauda and Borregaard's power plants in Sarpsborg willbe retained.The sale agreements were approved by the Board of Directors of OrklaASA and ofElkem AS on 4 October 2009."The power plants owned by Elkem in Salten and Bremanger are subjectto reversion, andmust be sold to public companies before the dates of reversion. Theoperations in Saudawill however be taken over by Statkraft in 2030 regardless of whetherElkem keep theplants or sell them to public companies. The power plant owned byBorregaard inSarpsborg was built before the reversion laws were enacted and can beretained perpetually.The power plants in Sauda and Borregaard will therefore be kept ,"says Orkla Presidentand CEO Dag J. Opedal.The shares in Elkem Energi Siso AS and Elkem Energi Lakshola AS (thepower plants in Salten)will be taken over by Norsk Vannkraftproduksjon AS, which is owned byNord-TrøndelagEnergiverk Energi AS and ÿstfold Energi AS on a 50/50 basis. Theshares in Elkem EnergiBremanger AS will be taken over by Svelgen Kraft Holding AS, 56 % ofwhich is owned bySogn og Fjordane Energi Produksjon AS, 34 % by TafjordKraftproduksjon AS and 10 % bySognekraft AS."Ownership of the hydropower plants has been important for thedevelopment of Elkem'sindustrial operations in the last 40 years. The plants that must besold before they are dueto revert, i.e. latest within the next 10-15 years, will therefore nolonger offer the long-termsupply of power that we need to develop our industrial activities. Wehave obtained goodconditions through competition between several bidders. We thereforechoose to sell now,based on the expectation that the consolidation of public powerproducers in Norway islikely to limit competition later on," says Bjørn Wiggen, Chairman ofElkem's Board ofDirectors and Orkla Executive Vice President.The total sale price is NOK 6,009 million, consisting of NOK 4,300million for Salten andNOK 1,709 million for Bremanger. Settlement will be made when thenecessary officialapprovals have been obtained.In autumn 2008, the Norwegian parliament passed a new Concession Actwith a view tosecuring public ownership of hydropower installations in Norway.Under the Act, onlypublicly-owned power companies may buy or build large hydropowerplants. Consequently,Orkla is unable to further develop its hydropower operations byacquiring and expandinghydropower plants.The new Act gives publicly-owned companies which take over privatepower plants thatare subject to reversion a statutory right of reversion waiver. TheNorwegian parliamentresolution constituted the enactment of a 30-year-old practice ofchanging concessionconditions in this way. The Svelgen III and IV, Siso and Laksholaplants, most of whichare due to revert to the state during the period 2021 to 2029, musttherefore be sold priorto their reversion.The Svelgen I and II power plants and a few small plants in Bremangerare under leaseagreements with Statkraft. The plants are operated as an integralpart of Elkem EnergiBremanger AS's power business. Contracts for 240 GWh of hydropowerare beingconcluded to ensure that the power from these plants will be used asintended at theElkem Bremanger smelting plant.The power plants in Sauda are regulated by a civil law leaseagreement with Statkraft.The agreement runs until 2030, after which the power plants will bereturned to Statkraftin return for financial compensation equivalent to the residual taxwritten down value ofthe newly built plants. In a normal year and based on current marketexpectations, theSaudefaldene plants are anticipated to contribute an annual EBITDA ofapproximatelyNOK 250-300 million.In addition to Elkem's power plants in Sauda, Borregaard holdsreversion-free powerrights, primarily in Sarpsborg. Orkla's hydropower operations willhereafter consist ofproduction of around 2.5 TWh.Elkem AS and Borregaard AS are wholly-owned subsidiaries of The OrklaGroup.Elkem AS owns 85 % of Saudefaldene.DnB NOR Markets has acted as the financial adviser to Orkla in thesetransactions.Orkla ASA,Oslo, 5 October 2009Media contacts:Bjørn Wiggen, Chairman of the Board of Elkem and Executive VP, OrklaASA,Tel.: + 47 47 82 09 37Johan Chr. Hovland, Senior VP, Elkem Energi and SVP Public Affairs,Elkem AS,Tel.: +47 91 76 34 91Investor Relations contacts:Rune Helland, tel.: +47 22 54 44 11Siv Merethe S. Brekke, Tel.: +47 22 54 44 55This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 05.10.2009 - 08:01 Uhr
Sprache: Deutsch
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