Skambud on German brown coal by road – Västerbotten Courier

Economy. It is expected skambud on Vattenfall’s German lignite assets week. Yet one billion blow to threaten thereby the loss-making state-owned energy group, which may be forced to sell assets for political reasons.

Facts

Vattenfall’s expansion into Germany and brown coal began in the late 1990s, with Carl-Erik Nyquist as CEO. Acquisition of the Bulge, which was made possible by the liberalization of Europe’s energy market, ended with Lars G Josefsson’s controversial purchase of the Dutch company Nuon in 2009.

Today generates Vattenfall’s four German brown coal power plant about 55 terawatt hours per year, equivalent to 9 percent of total German power production.

Two Czech energy company CEZ and EPH, has announced interest in buying the assets. Sources also pointed out the Australian investment company Macquarie together with the German power producer Steag as stakeholders, though this interest, according to German media have cooled. A potential buyer is also the Czech mining company Vrsanska Uhelna.

Brown coal’s climate policy contentious as an energy source as it gives rise to substantial carbon emissions.

Source: Reuters, Waterfall

Waterfall invited last September into potential bidders to express their interest in Vattenfall’s German lignite assets.

the goal is to sell all the related lignite production and mining assets in Germany. It involves four power stations: Boxberg, Jänschwalde and Schwarze Pumpe and on what is called the device R by Lippendorf. Moreover, mining in Jänschwalde, Nochten, Reichwalde and Welzow-Süd. The mine Cottbus Nord was previously included in the offer, but have been discontinued.

It may also be necessary to incorporate a dozen German hydropower plants in the deal, while the rest of Vattenfall’s operations in Germany – district heating, electricity distribution, sales, trading and wind power – will not be included.

Source: Waterfall

Vattenfall has put the lid on on March 16, when the bids will be filed. The message from CEO Magnus Hall is that during the first half of 2016 would be able to present a proposal.

A source of a potential bidder, however, say TT that he is sure that several competing bid is on the way.

– We are working feverishly with our final offer, the source said.

the government presses

in just over a year ago there was talk of a value of up 30 billion in assets. It remains a fraction, according to analysts, including after a writedown of 15.2 billion last year.

The price is lowered by parts of the assets is about to get backup power and to the life of the rest can be limited the political decision of the German government.

James Magnussen, analyst at Danske Bank believe that the Swedish government will push waterfall into a business, even if financially unable to recoup:

– the price will be extremely low, so from a business point of view there will be no attractive bid. But it is a hard public pressure on Vattenfall disposes of its lignite business.

– There is no economic argument that drives this process, it’s about emotional arguments.

Risk of losses

There is even speculation of payment models which Vattenfall would be paid in installments, as long as certain conditions are met. Another model is that Vattenfall will co-finance future site restoration costs.

– My feeling is that the bids will be conditional with various types of reservations, says Ingvar Mattsson, analyst at Swedbank.

Mattsson see a risk of capital losses of several billion. Though like other analysts TT talked to believe he is difficult to define more precisely how big bang can be. Vattenfall’s balance sheet guidance is lacking.

Basically disagree

Several Czech company and a German-Australian consortium has since last fall, more or less openly expressed interest in buying the assets, which account for 9 percent of Germany’s power production.

the Swedish government parties and the S MP is fundamentally disagree on the issue. But Vattenfall’s strategic objective to focus on sustainable energy production and German energy policy limits the room for maneuver.

Last fall, said Environment Minister Åsa Romson (MP) that it is useless to try to stop the deal in parliament, when there is a majority to change owner directives. The news then came the MP Congress in June had decided that climate policy would be better to liquidate rather than to sell.

If Vattenfall deciding to sell should the deal be approved by the government, perhaps even the parliament, if it deemed to be a significant part of Vattenfall’s assets and sales.

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