International Power eyes Drax

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The Independent Online

International Power, the electricity generator, said yesterday it had £1bn to spend on acquisitions and hinted it would be interested in buying Drax, Britain's biggest power station, if it came on the market.

The group also indicated it was keen to expand its presence in the US and Middle East but played down suggestions it would bid for generating stations owned by the collapsed energy trading giant Enron.

News of International Power's expansion plans came as shares in the company rose 8 per cent on the back of better-than-expected results. Pre-tax profits before exceptional items rose 48 per cent last year to £326m.

Asked whether the company would bid for the 4,000 megawatt Drax station in Yorkshire if its present owner, AES, decided to sell, Peter Giller, International Power's chief executive, said: "At the right price, why not?"

However, he said it was unlikely the company would be bidding for Enron's remaining power station assets outside the US. He said the ownership of the assets was complex and it was difficult to find anyone in Enron to deal with.

International Power has net debt of £900m but it could afford to raise this to £2bn without stretching its balance sheet or reducing interest cover too far. Abu Dhabi, Oman and Qatar are among the Middle East countries it is targeting for expansion.

Performance was boosted by the addition of 1,950 megawatts of new capacity in the US, increasing North American turnover by 58 per cent, and improved pricing in Australia, where International Power owns the Hazelwood generator.

Mr Giller, who famously decided to take all his pay in shares, insisted he had no regrets about the decision even though it has cost him £675,000 in lost pay. International Power's shares have fallen by a third since it was demerged from National Power 18 months ago.