Wednesday 21 November 2018

ESB sells off its 50pc stake in Marchwood for €180m

John Mulligan

John Mulligan

The ESB has sold its 50pc stake in Marchwood power station in the UK to a unit of reinsurance giant Munich Re for an estimated €180m.

The semi-state also said that the sale of its 50pc stake in Bizkaia Energia, the company behind a power plant in northern Spain, is expected to close in the new year.

The ESB is selling the stakes so it can make a €400m special dividend payment to the State next year on top of a €65m special dividend this year.

That has angered unions, who insist the company must help plug a €1.6bn deficit in a worker pension scheme. ESB workers this week voted in favour of industrial action as a result of the issue.

Last month, the ESB said it had selected preferred bidder for both Marchwood and Bizkaia Energia, but declined to name the suitors. The ESB declined yesterday to say whether Munich Re's MEAG unit is also the preferred bidder for the stake in the Spanish station, a 755 megawatt power plant.

Industry publication 'SparkSpread' reported this week that other bidders for the ESB's stake in Marchwood included Japan's ITOCHU, Tokyo Gas and Osaka Gas, UBS Infrastructure and China's CKI.

The ESB didn't reveal how much it received from the disposal of its holding in Marchwood, an 800 megawatt combined cycle gas turbine operation near Southampton.

It cost almost £400m (€500m at the time) to build and was opened in 2010. It was a joint venture between ESB International and Scottish and Southern Electricity, the owner of Airtricity.

Marchwood Power, the company behind the plant, generated revenue of £66.3m (€79.5m) in 2012 and an operating profit of £39.3m (€47.1m).

The figures were down 3pc and 17pc respectively on 2011. The company had total borrowings of £249.3m (€299m) at the end of 2012 and net assets of £92.6m (€111m).

Paddy Hayes, director of generation and wholesale markets at ESB, said that "by every measure" Marchwood had been a very successful project.

Last month, four ESB workers brought a legal challenge over what they say is the "wilful and deliberate" failure by the company to address the apparent deficit in their pension scheme. The case isn't expected to be heard until early next year.

But the ESB has insisted it has no further obligation, having contributed nearly €600m to the scheme when it was restructured in 2010.

Irish Independent

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