International Power completes UK Saltend CCGT acquisition
UK-based generator International Power has completed its acquisition of the 1,200 MW Saltend CCGT from the US Calpine Corporation, the company confirmed on Thursday. International Power announced its plan to buy the plant, which it acquired in conjunction with Japan’s Mitsui & Co on a 70:30 basis, in May, for a total consideration of £500 million.
Of the £500 million, £315 million is accounted for by the CCGT itself, £175 million for the associated gas and power contracts and £10 million for working capital. Around 7% of the plant’s electricity output, and all of its steam output, is contracted to BP Chemicals Ltd under separate sales agreements which expire in 2015. Saltend is located adjacent to BP Chemicals petrochemical plant near Hull in northern England.
The remaining electricity output is sold directly onto the UK wholesale power market. Natural gas for the CCGT is supplied by BP Gas Marketing Ltd under a supply contract that also expires in 2015.
The acquisition will be funded by a combination of debt and equity on a 55:45 ratio. The total equity investment of £225 million comprises £158 million from International Power and £67 million from Mitsui. The remaining payment will be funded by non-recourse debt of £275 million.
International Power said it expected Saltend to turn a profit in the first full year of ownership. In the year to 31st December 2004, Saltend generated profit before tax of £16 million on net assets of £112 million under UK GAAP.
Other Related Stories
