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UPDATE 1-Vattenfall readies $4 bln in sell-offs - sources
February 22, 2011 / 11:50 AM / in 7 years

UPDATE 1-Vattenfall readies $4 bln in sell-offs - sources

* Deutsche Bank to lead trio of disposals

* Biggest sales likely in Poland, Finland

* Leonardo to run Belgian sale, Jefferies to sell gas assets

(Adds background on strategy, likely sales and proceeds)

By Quentin Webb and Greg Roumeliotis

LONDON/AMSTERDAM, Feb 22 (Reuters) - Vattenfall AB , Europe’s fifth-largest electricity producer, has hired investment banks to sell businesses worth more than 3 billion euros ($4.1 billion), people familiar with the matter said. The state-owned Swedish power giant has been reviewing “non-core” businesses since September, as it looks to boost profitability partly by reversing a decade of overseas expansion.

Vattenfall [VATN.UL] wants to bolster its balance sheet, cut carbon emissions and sharpen its focus on three key markets -- Sweden, Germany and the Netherlands.

Vattenfall hired Deutsche Bank (DBKGn.DE) to lead the disposal of non-core businesses in Poland, Finland and Denmark, the people said. Deutsche will work with Danske Bank on the Danish and Finnish sales, and with ING in Poland, they added.

Boutique Banca Leonardo will advise on the sale of a smaller business in Belgium and Jefferies will advise on the sale of upstream gas assets, some of the people said.

“We have started the process to evaluate potential divestments of assets in our non-core countries,” Vattenfall spokesman Ivo Banek said in an email. “(We) at this stage are not able to disclose information on our financial advisors or the estimated value of the assets.”

The potential Polish sales, including a heat and power plant in Warsaw and a electricity distribution network in the south, could fetch as much as 1.5 billion euros, two of the people said.

Vattenfall’s non-core Finnish business, chiefly an electricity distribution network that is the country’s second-biggest, could fetch about 1 billion euros, three of the people said. The grid’s regulated returns mean it could draw interest from infrastructure funds and other financial buyers.

In Denmark, non-core sales could net Vattenfall 500 million euros, the two people added. It will keep its windpower business there -- which boasts more than 400 turbines -- but seek to sell its thermal power business, which has five combined heat and power (CHP) plants. ($1=.7316 Euro) (Reporting by Quentin Webb in London and Greg Roumeliotis in Amsterdam; additional reporting by Philipp Halstrick in Frankfurt; Editing by Steve Slater and Erica Billingham)

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