Wednesday, June 23, 1999 Published at 13:50 GMT 14:50 UK
Business: The Company File
Hyder nets £105m in energy sell-off
Utility group Hyder is to sell its electricity and gas supply businesses to nuclear generator British Energy for £105m.
The sale will give British Energy sole rights to the Swalec brand.
Swalec supplies electricity and gas to mainly Wales-based customers. Hyder, which bought the Swalec supply and distribution business in 1996 for £872m, will retain the Swalec electricity distribution division.
Chief executive of Hyder, Graham Hawker said: "We have been very successful in growing our retail energy supply business and building the Swalec brand, capturing around 30% of the South Wales domestic gas market in just over 18 months.
"As the industry consolidates, it is clear that our energy supply business will have better long term prospects with a large energy group like British Energy."
Cardiff-based Hyder - which also owns Welsh Water - said the sale would allow it to increase its focus on infrastructure management and managed services.
On completion of the deal, 230 Cardiff-based staff, mainly in sales and marketing roles, will transfer to British Energy.
Hyder said no job losses were expected and the staff would remain in Cardiff.
Edinburgh-based British Energy said the purchase would create a platform for the group to grow a national electricity and gas supply business in England and Wales.
Peter Hollins, chief executive of British Energy said: "We are determined to become a competitive force in all segments of the energy supply market.
"Swalec is a high quality business with excellent potential to enable further expansion. We continue to look for opportunities to expand both domestically and internationally."
The enlarged British Energy group would hold about 6% of the total electricity supply market in England and Wales.
Last year, Hyder's energy supply businesses had turnover of £589m on pre-tax profit of £26.3m.
Swalec supplies electricity to 980,000 customers and gas to 320,000 customers, mainly in Wales.
The announcement comes a month after Hyder said it had received bid approaches from more than one interested buyer for the power supply business.
The sale of the business is subject to regulatory clearance. Completion is expected in the autumn.
Power generators move in
All of the UK's major power generators have now purchased retail electricity supply arms.
They fear that their profits will be hit by the electricity regulator's push for more competition.
That would shift the balance of power to the consumer supply companies, as demand would be stimulated by the cheaper prices.
Last week the French state-owned electricity company EdF swooped on regional supplier SWEB for £160m.
The Company File Contents