Posted February 11, 2019 14:12:56US electric utility company Southern Co. says it’s facing a massive electric grid disaster and has decided to sell its assets in a major shakeup of the market.
Key points:Southern’s shares have lost more than half their value since early March, but the company says it wants to sell assets it already ownsThe company says the restructuring is aimed at reducing costsThe company has been selling assets including its coal-fired power stations, power substations and power stations and is looking to sell power stations in NSW, Victoria and the ACTThe company, which owns two coal-powered plants in the US state of Tennessee, is seeking to sell a majority stake in the coal-burning power stations it operates in western Australia and the eastern states of New South Wales, Queensland and Western Australia.
The company’s latest annual report for March, which was released on Wednesday, shows its shares have fallen from more than $1.5 billion to less than $800 million in the last 12 months.
“This is a significant change in strategy,” Southern Co chairman and chief executive James Tamburini said.
We will also be taking steps to ensure the sustainability of the operation of the coal plants and ensure our operating margin is not adversely impacted by the sale.””
[We’re] going to be looking at the future and the need for our assets to be sold and our capital to be redirected to our current operations in Western Australian and Western Australian State.
We will also be taking steps to ensure the sustainability of the operation of the coal plants and ensure our operating margin is not adversely impacted by the sale.”
Southern said it was not yet finalising the sale of assets but had committed to sell the assets at auction within the next 12 months to avoid the loss of money it would otherwise be facing.
“We have made the necessary divestments and divestitures required to ensure that our assets are sold in the most prudent manner, to protect the financial interests of our shareholders,” Mr Tamborini said in the company’s annual report.
In the United States, which has the second-largest coal fleet after Australia, Southern operates more than 10 coal-generating power stations.
It has been the target of intense lobbying from some coal-related interests and is also under pressure from President Donald Trump to reduce its reliance on coal-generated electricity in its power plants and move towards renewable sources of electricity.
Southern also owns a large portfolio of power substation and power station assets in Australia, with its largest asset being its power stations at Coal Harbour in New South islam, in New Zealand.
“These assets are in good condition and are in a high risk of failure.
Southern Co is actively looking to dispose of these assets in the future,” Mr Nasser said.
Mr Tambinini said the company would also be considering a sale of its coal power plants in Victoria, and the coal generating plants in NSW and Queensland.
He said the restructuring of the electricity market had been a long-standing priority for the company.
“This restructuring has been designed to allow Southern Co to make the most of the opportunities we have available to us to deliver high-quality and cost-effective power generation,” he said.
Mr Nasser also said the utility would be making a decision on its long-term future in the United Kingdom.