NatPower on track for autumn demerger

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The Independent Online

National Power is to press ahead with its demerger this autumn after rejecting tentative approaches for both the whole group and its UK electricity generating and supply business Npower.

Sir John Collins, NatPower's chairman, said that he had been invited to enter talks as a "consulting adult" but had ruled out a sale of all or part of the business. Stressing that NatPower now intended to complete the demerger of its overseas arm, International Power, and Npower in October, Sir John said: "I would be very surprised if an acceptable offer materialises."

He was speaking as NatPower cleared the decks for the break-up by taking £1.4bn of exceptional charges and write-downs in its last set of accounts as a single company.

The bulk of the charges relate to NatPower's UK businesses and include a £334m charge to buy itself out of costly long-term gas contracts and the write-down of the value of its coal-fired stations to zero. There is also a £246m write-down of overseas power interests, including the Hub and Kot Addu stations in Pakistan, which have been written down to half their book value.

The exceptional charges plunged NatPower into a pre-tax loss of £62m for the year to 31 March. However, excluding one-off items, pre-tax profits came in a £514m - only 10 per cent down on 1999. The results were well ahead of most forecasts by analysts.

Brian Count, chief operating officer of Npower, confirmed it was interested in acquiring United Utilities' Norweb supply business as a means of doubling its retail energy customers to five million in the next four years. Peter Giller, chief executive of International Power, who is being paid solely in shares, said that the company's "ground-breaking" pay structure would see other executives heavily incentivised with stock.

Details of the remuneration structure will emerge when the two halves of NatPower publish listing particulars in August. The vote to approve the demerger will be in September, with dealings in the two new listed companies starting on 2 October.