BNFL to sell U.S. power plant construction subsidiary |
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Sat, 02 Jul 2005 13:35
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LONDON: State-owned nuclear energy company British Nuclear Fuels (BNFL) is all set to sell its Westinghouse power plant construction business.
Westinghouse, headquartered in Pittsburg, U.S., and with its operations concentrated mostly in that country, is valued at over 1 billion pounds. It has some 8,000 staff worldwide. For the year ending March 2005, the unit had recorded sales at 1.1. billion pounds and profits before interest and tax at 43 million pounds.
BNFL said it has received substantive offers. Companies like General Electric Co and some private equity firms are speculated to be in the run.
BNFL's chairman Gordon Campbell said in a statement Friday, the company's strategy review concluded that the company's businesses would be managed to deliver value and control risks to the U.K. tax payer and in line with this strategy, "we are starting a structured sales process for the Westinghouse business".
BNFL said its losses have gone up to 344 million pounds in the year ending March 2005 compared with 194 million pounds a year earlier. The company operates the Sellafield nuclear-reprocessing facility in northwest England.
BNFL's chief executive Mike Parker told newspersons that the sale process has been initiated and the 10 to 15 interested parties will be provided with information packs by the company's banker NM Rothschild next week. He said the full sale process will take about two years.
Parker said the increase in oil prices has caused a "change in the attitude and atmosphere towards nuclear (power). As a mature and a semi-autonomous business, Westinghouse is a prime asset that has all the skills to prosper in the private sector. It has reached all its targets, continues to win new business and is in an excellent position to capitalise on the China new-build programme."
BNFL has three strategic divisions now -- Westinghouse; British Nuclear Group, (engaged in decommissioning and clean-up work) and Nexia Solutions (a research and technology wing).
It has transferred most of its U.K. assets to the Nuclear Decommissioning Authority and the BNG division is left with the work of cleaning up Britain's nuclear sites. This is a highly competitive area, especially with several private sector players in the field.
The company's union, Prospect, which represents 6000 scientists, engineers and managers, fears that the sale will rob the company of its expertise when the country is trying to build more nuclear power stations.
In April this year, BNFL had a "level three" leak from a pipeline carrying nuclear waste at Thorp. The leak was contained in a heavily shielded cell without any damage to people and property.
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