DONG ditches Norwegian power plant in bid to shed losses – The Post

DONG ditches Norwegian power plant in bid to shed losses

Sale is part of strategy that has seen energy provider sell off a number of non-core businesses; next step could be to slash land-based Scandinavian wind farms

July 6th, 2013 7:00 am| by admin

State-owned energy provider Dong Energy announced that it will sell its Norwegian power plant, Energiverk Mongstad, as part of its long-term strategy.

Dong will earn 1.7 billion kroner by selling the power plant, which came online in 2009, into the hands of the Norwegian state-owned oil company Statoil.

The sale is part of an overall savings plan launched by Dong after it revealed that it has been battling crippling debts after failed efforts to enter the European natural gas market.

“With the Mongstad sale, we take another important step towards realising our financial action plan,” managing director Henrik Poulsen said. “We have now sold non-core assets for about nine billion kroner in total.”

Just last month Dong sold its share in a Swedish hydroelectric plant for 4.5 billion kroner and before that it unloaded land-based wind turbines for 700 million kroner. The land-based turbines didn’t fit into Dong’s strategy, which calls for a primary focus on offshore wind farms.

That means that Dong could possibly be entertaining the option of selling off their shares in Norwegian land-based wind farms Mehuken 1 and 2. Poulsen has previously hinted that the smaller wind farms in Norway and Sweden could also be sold.

The offloading of the Mongstad power plant means Poulsen is closing in on his goal of selling off 10 billion kroner worth of non-core assets by 2014.

Dong’s annual accounts for 2012 showed a four billion kroner loss and debt exceeding 33 billion kroner.