GE to auction off 40pc stake in Tynagh plant

Accounts for the Tynagh gas plant in Galway show pre-tax profit of just over €12m, compared to €45m the year before
Accounts for the Tynagh gas plant in Galway show pre-tax profit of just over €12m, compared to €45m the year before

General Electric is looking to sell its interest in an Irish power plant.

It is running an auction process for the 40pc stake in the Tynagh gas plant in Galway.

‘Sparkspread’, a renewables trade publication which reported the deal, said GE had appointed advisors Augusta & Co to run the process, which is code-named Project Titon.

The other investors in the project are Turkish conglomerate Gama, which has 40pc, and Irish energy investors Mountside Partners which has 20pc.

Mountside, has been working with Bord Gáis on an energy storage project which has been granted planning permission.

Tynagh Energy, the entity behind the plant in which the investors hold their stakes, did not respond to a request for comment yesterday.

A spokesperson for GE was unavailable for comment.

Tynagh’s most recently filed accounts, covering the year to the end of December 2016, show pre-tax profit of just over €12m, compared to a figure of almost €45.5m the prior year.

The accounts state that two 10-year contracts, which it had since 2006, had expired in March 2016 – a likely factor in the profit drop.

Full year revenue fell from €116m to €81.5m.

GE, under recently installed CEO John Flannery has embarked on a massive restructuring programme involving the sale of assets – including the stake in Tynagh.

“The biggest challenge we face continues to be working through the turnaround of our power business,” Mr Flannery said last month on a conference call with analysts.

The diminished outlook underscored the depth of GE’s troubles and threatens to damp enthusiasm around Mr Flannery’s efforts to extricate the company from one of the deepest slumps in its 126-year history.

Mr Flannery, who took the helm from Jeffrey Immelt last year, announced plans in June to separate the health-care unit and sell a stake in oil field services business Baker Hughes.

But the company was kicked out of the Dow Jones 100 Industrial Average after more than 100 years, a symbolic blow to one of the stock gauge’s original members. Second-quarter sales fell 19pc in GE Power.

Mr Flannery has said the market will likely be “soft” for several years. Demand for gas-fired power is flagging globally, in part because of the rising use of renewable-energy sources.

The woes dragged GE’s total adjusted profit down to 19 cents a share in the second quarter, which was still good enough to surpass the 18-cent average of analyst estimates compiled by Bloomberg.

Sales rose 3.5pc to $30.1bn (€26.5bn), compared with a projection of $29.4bn.

Jamie Miller, GE’s chief financial officer, acknowledged the issues in the power market but said broader results were in line with the company’s expectations.

There is “real strength across most of our portfolio,” she said. (Additional reporting Bloomberg)

Irish Independent

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