A review of power plant deals in 2004 shows that utilities are buying.
Buying Time
Slowly and cautiously, utilities are moving back into growth mode.
The air is buzzing with talk of mergers and acquisitions (M&A). It can be heard in the boardroom and on the trading floor. Bankers hear it, and they see their deal backlog beginning to grow. Fund managers hear it, as they hunt for the best buys in the market before strategic investors snatch them up. Financial advisers and lawyers hear it, too; their phones are ringing more than they have in years.
People for August 2004.
Utilities are absorbing distressed IPPs, and raising alarm bells in the process.
Financial players bring credit depth to energy markets, but will they play by the rules?
People
New Oportunities:
Philip Carroll Jr. returned to ScottishPower as a non-executive director. According to the Comtex News Network, Carroll left ScottishPower earlier in 2003 to assist with the rebuilding of infrastructure in post-war Iraq.
Chesapeake Utilities hired Joe Steinmetz as its director of Internal Audit. Steinmetz served in the same position with Dover Downs Gaming & Entertainment Inc. and Dover Motorsports Inc. from 2001 to 2003 before being promoted to assisted controller.
New Positions:
Allegheny Energy named David C. Benson its interim executive vice president, assuming the responsibilities of Allegheny Energy Supply President Michael P. Morrell, who will make use of the company's early retirement option program. Benson has been with Allegheny Energy for 25 years.
Cleco Corp. appointed Stephen M. Carter vice president of regulated generation. Carter earlier served as superintendent of Dolet Hills power station.
NRG's bankruptcy is challenging creditors' resolve to back merchants until power prices rebound.
A common complaint in the last few months by would-be buyers of merchant assets has been that all the choice power plants have been pledged as collateral to commercial banks in order to stave off bankruptcy. That's why not many transactions have taken place, merchant asset buyers say, as everything else in the market isn't worth the price being offered.
New Positions:
Martin Crotty and Dr. Soumen Ghosh joined SeaWest WindPower Inc. as senior vice president of operations and maintenance, and senior product manager of data services, respectively. Most recently, Crotty was director of operations for the Western Region of NRG Energy. Ghosh spent more than five years at ABB System Control and more than nine years at CMC.
Companies that were on a buying spree before 2001 are putting assets worth billions n the block
A casual observer might expect that the industry's economic condition would produce a cornucopia of cheap assets for acquisitive companies . Eventually it might, but so far, it generally has not.