NatPower moves into domestic gas market

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The Independent Online
NATIONAL POWER yesterday moved into the domestic gas market with a surprise pounds 20m takeover of Calortex, the country's second-biggest independent gas retailer, and hinted it was looking for further acquisitions.

Together with the Midlands Electricity supply business, bought for pounds 180m last year, this deal will give National Power 2.7 million domestic customers and allow it to move more aggressively into the home energy market with "dual fuel" offers.

Calortex, a joint venture between Calor and Texaco set up in 1995, now has 500,000 domestic gas customers, giving it 3 per cent of the total market. Centrica, trading as British Gas, still has an 80 per cent share.

In terms of independent gas retailers, Calortex is second only to Eastern group with a 13 per cent share. Last year Calortex had sales of pounds 77m and net assets of pounds 9m.

Keith Henry, chief executive of National Power, said its aim was to grow the supply business, eventually serving four to five million customers. Other gas and electricity supply businesses are being looked at.

A spokesman said there were no plans at present to replace Midlands Electricity or Calortex brands with National Power. The company's industrial and commercial energy supply business trades as Energy Direct.

No price details of the Calortex deal were disclosed, but analysts estimated National Power is paying just under pounds 40 per customer. This compares with the pounds 100 to pounds 160 per customer it paid when it took over Midlands' retail arm.

Meanwhile National Power said it had begun sending out the information memorandum on the sale of its 4,000-megawatt Drax coal-fired station. The sale is expected to raise about pounds 2bn.

PowerGen is close to selling off two of its coal-fired stations, Fiddler's Ferry and Ferrybridge, for up to pounds 1.5bn. Observers believe nuclear generator British Energy and Mission Energy of the US, which already owns UK hydro- electric stations, will each buy a station.