PowerGen lines up US buyer

POWERGEN is poised to announce the pounds 1bn-plus sale of two of its coal-fired power stations to a US electricity company. The UK generator has decided to sell the two stations - Ferrybridge and Fiddler's Ferry - to a single bidder in order to maximise the price.

The two stations will be sold to either NRG or Edison Mission Energy, both of the US, and an announcement is expected to be made early next week.

There had been speculation that the two stations would be sold separately. But PowerGen is understood to have persuaded the Government that in order to create a powerful new competitor in the UK electricity market, it is preferable to have just one buyer.

Edison Mission Energy already owns the pumped storage power stations that were formerly part of National Grid, which may tip the balance in favour of NRG.

The two stations, which each have an output of 4,000 megawatts, are expected to fetch between pounds 1bn and pounds 1.5bn, which will include the coal supplies they are already contracted to buy.