Irish power firm Viridian, which trades as Energia, could be put up for sale by its US private equity owner in what would be the company’s second change of ownership in as many years.
I-Squared bought Viridian in 2016 for about €1bn from Bahrain’s Arcapita. This is the second time in about a year that there’s been speculation the US firm is looking at selling all or part of Viridian.
News agency Bloomberg reported that I-Squared is now sounding out potential buyers to gauge their interest in Viridian. A sale would also come following a tumultuous year for Viridian.
In January, Viridian signalled that it was planning to close its gas-fired power stations at Huntstown in north Dublin after one of the plants failed to secure a capacity contract from national grid company EirGrid under the new Integrated Single Electricity Market (ISEM).
The ISEM is the new wholesale electricity market arrangement for Ireland and Northern Ireland.
The new market arrangements are designed to integrate the all-island electricity market with European electricity markets, enabling the free flow of energy across borders. One of Viridian’s Dublin power plants was awarded a capacity contract under the ISEM, but another of the Huntstown plants was not. The plants are operated by Energia.
Viridian said at the time that because one of the facilities did not secure a contract, the two plants would not be able to recover their costs from May. But Viridian later successfully appealed the decision by EirGrid not to award one of its plants a capacity contract. An appeals panel had ruled that the Huntstown power plants – which, combined, generate up to 747MW of electricity, or up to 20pc of Ireland’s total power output – were needed to maintain security of supply in Dublin. Accounts for Viridian Energy, which trades as Energia, show that it made an operating profit of €39.3m in the financial year to March 2017, compared to €26.5m a year earlier.
The company said that this reflected increased residential customers, as well as improved non-residential margins.
It had 145,300 residential electricity and gas customer sites at the end of last year, compared to 117,600 a year earlier.
Its revenue fell by €32.5m to €801.9m in the 2017 financial year, primarily due to lower non-residential revenue.
Viridian’s Power NI unit in Northern Ireland generated £445.8m (€499m) in revenue in the 2017 financial year, and a £33.1m (€37m) operating profit. Meanwhile, interim results released yesterday for Northern Ireland Electricity Networks, the distribution company owned by the ESB, show that excluding amounts attributable to public service obligation charges, its group operating profit in the first six months of the year fell almost 10pc to £46.7m (€52.2m), reflecting £7.1m in redundancy costs.
Those redundancy costs were incurred because of the impact on the business of new price controls and cost reduction challenges.