UPDATE 1-Verbund says needs more time to decide on gas plants
* Verbund buys out Thermal Power junior partner
* Mellach gas plant to keep running for now
* Restructuring, cost cuts in Italy, France (Adds comments from spokeswoman, background)
VIENNA, Dec 11 (Reuters) - Energy group Verbund needs more time to decide the future of its struggling gas-fired power plants, which it had hoped to resolve by the end of the year, it said on Wednesday.
Verbund is battling a difficult environment for gas power plants in Europe, where demand is low due to a weak economic climate, while competing renewable energy sources are being heavily subsidised in neighbouring Germany, the continent's biggest economy.
The company said it was buying out its junior partner in Verbund Thermal Power, Energie Steiermark, to give it freedom to decide what to do with its Mellach power plant in Austria, which is part of the Thermal Power venture.
But it said it would keep Mellach as well as its gas power plants in France and Italy running for now, although it would cut costs and restructure its foreign operations.
"These are the first steps. We'll need more time to decide about the whole gas portfolio," a spokeswoman said.
Verbund took 1.1 billion euros ($1.5 billion) of writedowns earlier this year, much of that for its gas portfolio, and had said last month it was in talks to sell the Mellach plant.
One of the factors that will influence its decision on Mellach is an Austrian competition court decision it is awaiting on a long-term gas-supply contract with OMV unit EconGas, which includes and oil-indexed price formula.
The spokeswoman said she could not estimate when a court decision might come on the case, which it brought last May.
Verbund said Italy's Sorgenia group, in which it has a 46 percent stake, was "confronted with material market turmoil in the Italian market. The management of Sorgenia is working now to implement a restructuring plan."
Italian media have reported that Sorgenia is in talks with its lenders.
In France, where Verbund operates two gas-fired power plants, the company said a court had ended a gas supply agreement for the Pont-sur-Sambre site, where it had also adopted other cost cuts.
It was cutting costs as well at the Toul plant and examining other potential options for action. ($1 = 0.7251 euros) (Reporting by Michael Shields; editing by Keiron Henderson and Jane Merriman)
- Exclusive: Malaysia plane probe narrows on mid-air disintegration - source
- Radar showed missing plane may have turned back: Malaysia military
- Missing Malaysian jet may have disintegrated in mid-air: source |
- Malaysian plane presumed crashed; questions over false IDs |
- Merkel raps Putin as Russian forces tighten grip on Crimea |