Troubled US power company Calpine divests its last remaining UK asset to an alliance of International Power and Mitsui
Calpine has reached an agreement to sell a gas-fired power station located near Hull in the north of England to an alliance of Japan’s Mitsui and the UK’s International Power in a 70/30 partnership led by International power. Saltend, Calpine’s last asset in the UK, is to change hands for £500 million ($911 million) of which International Power will pay £150 million ($270 million) and Mitsui £65 million ($117 million) with the rest coming through project financing by a group of banks.
The same partnership featured in a $2.2 billion deal last year with Edison Mission Energy of the US to take over 13 power plants.
Credit Suisse First Boston advised Calpine on the transaction.
Calpine bought the 1,200 MW coal-fired plant in 2001 for £560 million, at the time around $800 million.
“Saltend is a modern, efficient plant, and will be earnings enhancing in the first full year of ownership and immediately cash generative,” International Power chief executive Philip Cox said of the deal.
Other European players thought to have expressed an interest in acquiring the plant include Gaz de France, Centrica of the UK and Germany’s E.On and RWE.