Continuing its expansion, PP&L Global, Inc., announced Thursday (6/18) that it has doubled its ownership stake in South Western Electricity, plc (SWEB), the regional electricity company based in Bristol, England.
SWEB has consolidated assets of about $2.9 billion.
PP&L Global, which has owned 25 percent of SWEB since 1996, has purchased an additional 26 percent equity interest from its co-owner, Southern Energy Inc., which is an affiliate of Southern Company.
PP&L Global, based in Fairfax, Va., is a subsidiary of PP&L Resources, Inc. (NYSE: PPL).
The purchase price for the additional ownership is $170 million (U.S.). PP&L Global now owns 51 percent of the equity interest and 49 percent of the voting interest in SWEB. While Southern Energy will retain operating control of SWEB, PP&L Global will be increasing its role in management and on the board of directors.
William F. Hecht, PP&L Resources chairman, president and chif executive officer, said the acquisition of an increased interest in SWEB is an exciting addition to PP&L Global's worldwide operations.
"As our additional ownership interest shows, we are convinced that this is a top-notch company. Since we acquired our initial ownership interest, SWEB's operational performance has exceeded our expectations, and we anticipate that this trend will continue into the future," said Hecht.
"PP&L Global, under the direction of Prsident Bob Fagan, has made exceptional progress in helping PP&L Resources build a stream of revenues outside the U.S. regulated electricity business," said Hecht. "PP&L Global is well ahead of its original business plan."
Fagan said that PP&L Global subsidiaries and affiliates now serve more than 2 million electric distribution customers in the U.K., Chile and El Salvador. In addition, PP&L Global owns interests in electric generation facilities in Spain, Portgal, Bolivia and Peru.
PP&L Global also is negotiating development rights for additional generation in various locations throughout the United States.
"PP&L Global's focus on the Americas, U.K. and European markets has turned out to be a very successful strategy," said Fagan. "We are succeeding by concentrating on opportunities that arise from deregulation in areas of the world that have demonstrated economic stability and growth."
SWEB, one of 2 formerly government-owned British utilities privatized in 1990, has 1.3 million customers. SWEB serves one of the fastest-growing areas of Great Britain, and it is experiencing above-average economic growth. SWEB has about 2,600 employees.
P&L Resources also is the parent company of PP&L, Inc., which provides electricity delivery service to 1.2 million customers in eastern and central Pennsylvania; generates electricity; sells retail electricity throughout the state of Pennsylvana; and markets wholesale electricity in 25 states and Canada.
Other PP&L Resources subsidiaries include PP&L Spectrum, Inc., which markets energy-related services and products; and H. T. Lyons, Inc., an energy management and heating, ventilating and air-conditioning firm. PP&L Resources is awaiting regulatory approval for the purchase of Penn Fuel Gas, a natural gas and propane company with about 100,000 customers.
The matters discussed in this release ontain certain forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, that involve estimates, assumptions, risks and uncertainties that could cause actual results to differ materially from those described in thse statements. These forward-looking statements were based on current expectations and were derived using numerous assumptions, including assumptions about economic conditions in the SWEB territory, the impact of competitive pricing and other competitie pressures within the utility industry in the U.K., the political and regulatory environment in the U.K., the effect that any reaction to competitive pressures has on the industry, the need for and effect of any business or industry restructuring, SWEB's profitability and liquidity, system conditions and operations costs, financing costs, interest rates, performance of new ventures and SWEB's commitments and liabilities.
Other factors and assumptions not identified abve also were involved in the derivation of these forward-looking statements, and the failure of such other assumptions to be realized, as well as other factors, also may cause actual results to differ materially from those projected.