news20091230reut3

[Top News] from [REUTERS]

[Green Business]
Sudip Kar-Gupta
PARIS
Tue Dec 29, 2009 8:37am EST
France's Theolia in debt deal, plans capital hike
PARIS (Reuters) - French wind farm operator Theolia, which cut back on growth plans last year due to the credit crisis, struck a debt restructuring deal and announced a capital increase to help finance future projects.

Theolia, whose shares fell more than 12 percent following the announcement, was forced last year to scale down its ambitions and cut costs to focus on preserving cash as a result of the economic downturn, which made financing for new power projects harder to come by.

However, the company said on Tuesday that there were signs that conditions within its market sector were improving.

"We now see early signs of a recovery in the wider wind sector as credit markets begin to improve, providing the industry with a more benign environment for 2010," Theolia Chief Executive Marc van't Noordende said in a statement.

Theolia, which reported a first-half net loss of 14 million euros in August, said on Tuesday it had agreed with the majority of its creditors to extend the maturity on its convertible bonds.

It added it was planning to launch a capital increase for a maximum of around 100 million euros ($144.1 million) early next year either through a rights issue priced at 1 euro per share or through the issue of warrants.

"I am confident that the financial restructuring will now provide the key element to assure the company's future growth," van't Noordende added.

"The company has not yet got itself completely out of trouble but it can hope to carry on operating in more normal business conditions," French brokerage Raymond James said in a research note. It kept a "sell" rating on Theolia shares.

SHARES FALL ON RIGHTS ISSUE IMPACT

The expected dilutive impact of the capital increase caused Theolia's shares to plunge. The stock was down 12.7 percent at 2.83 euros in mid-morning trade, giving Theolia a market capitalization of around 113 million euros.

After two hours of trading, the volume on Theolia shares represented 5 times the stock's 90-day average daily volume.

"The stock has recently been hammered because of the company's debt problems, so this is good news, although the diluting effect from the cap hike is what's dragging down the shares. It's a knee-jerk reaction," said a Paris-based trader.

Raymond James also said the capital increase risked being "extremely dilutive" for shareholders.

Theolia shares, which slumped 85 percent last year, have fallen around 7 percent so far this year.

(Additional reporting by Blaise Robinson; Editing by Jon Loades-Carter)


[Green Business]
NEW YORK
Tue Dec 29, 2009 3:02pm EST
Michigan issues air permit for new CMS coal plant
NEW YORK (Reuters) - Consumers Energy's proposed 830-megawatt coal-fired power plant at the Karn/Weadock complex in Michigan has moved a step closer to construction after the state issued an air permit for the project, the company said Tuesday.

Consumers, a unit of Jackson, Michigan-based CMS Energy Corp, said it would retire up to seven older coal-fired units -- five when the new plant enters service and another two depending on the needs of its 1.8 million Michigan customers.

The company has not identified the older coal plants to be retired but planned to do so when it files for a certificate of necessity with the Michigan Public Service Commission in 2010, a spokesman told Reuters.

The new plant is expected to cost more than $2 billion and enter service in 2017.

It's a tough time to build new coal plants, in part due to uncertainty over whether the federal government will cap carbon dioxide emissions from coal and other fossil-fired power plants in an effort to stop global warming.

But Consumers, which has the oldest coal-fired fleet in the nation with an average age of 50 years, said the new plant, the retirement of the old plants and its plans to invest billions in renewable power, efficiency and demand side management would significantly reduce overall emissions, including carbon.

Consumers said production of the currently regulated emissions would be down as much as 91 percent for sulfur dioxide, 83 percent for nitrogen oxides and 81 percent for mercury.

Consumers said it would design the new plant to utilize carbon capture and storage technology once it becomes commercially and economically viable.

The new project would create 1,800 construction jobs, about 2,500 indirect jobs and more than 100 permanent jobs after it is operating, providing an estimated $1.2 billion boost to Michigan's economy, the company said.

"This permit moves our project a step closer to creating badly needed jobs and boosting the state's economy," John Russell, Consumers president and chief operating officer, said in the release.

The 2,101 MW coal, oil and natural gas-fired Karn/Weadock complex is located near Bay City about 115 miles north-northwest of Detroit. It uses about 3 million tons of coal a year, according to the company website.

Coal dominates generation in Michigan, according to federal data, supplying nearly three-fifths of the state's power. But Michigan has mandated that 10 percent of electricity come from renewable sources by 2015.

Consumers plans to invest more than $1.2 billion to build 450 MW of wind generating capacity, among other things.

(Reporting by Scott DiSavino; editing by Jim Marshall)


[Green Business]
BEIJING
Tue Dec 29, 2009 11:00am EST
China speeds up resettlement in water mega-scheme
BEIJING (Reuters) - China will use stimulus spending to speed up shifting 330,000 people slated to be displaced for a vast water transfer project, accelerating work on the troubled scheme, an official newspaper said on Tuesday.

Green Business | China

The displaced residents, mostly poor farmers in central China's Henan and Hubei provinces, are being moved for the South-North Water Transfer Project, which will draw water from southern rivers for the country's dry north.

The construction of two long canals in central and eastern China has been troubled by chronic pollution, troubles relocating displaced residents and engineering hitches.

But now Zhang Jiyao, the official in charge of the project, has "urged local authorities to complete all migrant displacement by the end of 2011," the China Daily reported, citing an official meeting on Monday. The earlier deadline was 2014.

Half the residents will be relocated by the end of 2010, when 48 billion yuan ($7.03 billion) will be spent on the project, boosted by funding from China's blitz of stimulus spending to counter the financial crisis, said Zhang.

Big dams and hydro projects have been a lightning rod for discontent in China. Around the Three Gorges Dam, the nation's other mighty hydro project, clashes dogged the move of 1.4 million residents.

The South-North Project is the latest of these ambitious efforts, and the push to speed up resettlement could stir more complaints from farmers, especially near the Danjiangkou Dam that will feed the main central route.

Most of the people displaced by its rising waters will be sent to less fertile farmland. Resettlement there began earlier this year.

"Nobody really wants to move," said Ma Feng, a villager from Machuan Village near the dam, who was moved earlier this year to a new home hundreds of kilometers away.

"We were forced to accept it in the end, because the officials and police made us," she told Reuters by telephone. "But if they move all the dam residents, that will be much more difficult."

The central route will wind along 1,421 km (883 miles) of canals and tunnels from Danjiangkou to Beijing, as well as the nearby port city of Tianjin and surrounding areas. The separate eastern route cuts through coastal provinces up to Tianjin.

The planned completion for the first stage of the central route was pushed back to 2014 after it became clear that earlier deadlines of 2010 and 2008 could not be met.

A proposed western route, which would tap rivers on the Tibetan highlands to feed northwest areas, is still being examined by experts.

($1=6.829 Yuan)

(Editing by Dean Yates)