Norsk Hydro: Hydro and Agder Energi sign LoI to establish a jointly owned
company to develop Otra assets
OSLO, Norway, Sept. 27, 2013 (GLOBE NEWSWIRE) --
Hydro and Agder Energi have signed a Letter of Intent (LOI) for the possible
establishment of a jointly owned company to operate and further develop their
combined assets in the Otra River, southern Norway, where Hydro recently
acquired the Vigelands Brug hydropower plant.
The LoI is conditional on a proposed adjustment of the Industrial Concession Act
to enable private entities the possibility to organize an ownership share in a
company with liability (ANS/DA). This will enable private entities to take out
profit in the form of power rather than restricting it to financial
remuneration, which is important to Hydro as a fully integrated aluminium
company active throughout the value chain from bauxite to finished products.
Should it materialize, Hydro would own less than one-third of the envisaged
jointly owned company (DA), which would satisfy the legal requirements regarding
public control and be comparable to Hydro owning one-third in a private limited
Hydro acquired the 180 GWh Vigelands Brug hydropower station on the lower Otra
River in June, as part of a broader agreement with Rio Tinto Alcan to take over
both the high-purity Vigeland Metal Refinery and the on-site "run-on-the-river"
power station. Based in southern Norway, Agder Energi is Norway's fourth-largest
power producer, with 47 fully owned and part-owned production assets - of which
10 are located on the Otra River.
In addition, Hydro and Agder have signed an agreement regarding project
management support. Hydro's Projects unit has provided project management
resources and systems to Agder Energi since summer of 2012 to execute the
Iveland 2 project. This cooperation has now been extended through a
Collaboration Agreement to cover all of Agder Energi's major hydropower
projects, lasting for several years.
Contact Pål Kildemo
Cellular +47 97096711
Contact Halvor Molland
Cellular +47 92979797
Certain statements included within this announcement contain forward looking
information, including, without limitation, those relating to (a) forecasts,
projections and estimates, (b) statements of management's plans, objectives and
strategies for Hydro, such as planned expansions, investments or other projects,
(c) targeted production volumes and costs, capacities or rates, start-up costs,
cost reductions and profit objectives, (d) various expectations about future
developments in Hydro's markets, particularly prices, supply and demand and
competition, (e) results of operations, (f) margins, (g) growth rates, (h) risk
management, as well as (i) statements preceded by "expected", "scheduled",
"targeted", "planned", "proposed", "intended" or similar statements.
Although we believe that the expectations reflected in such forward-looking
statements are reasonable, these forward-looking statements are based on a
number of assumptions and forecasts that, by their nature, involve risk and
uncertainty. Various factors could cause our actual results to differ materially
from those projected in a forward-looking statement or affect the extent which a
particular projection is realized. Factors that could cause these differences
include, but are not limited to: our continued ability to reposition and
restructure our upstream and downstream aluminium business; changes in
availability and cost of energy and raw materials; global supply and demand for
aluminium and aluminium products; world economic growth, including rates of
inflation and industrial production; changes in the relative value of currencies
and the value of commodity contracts; trends in Hydro's key markets and
competition; and legislative, regulatory and political factors.
No assurance can be given that such expectations will prove to have been
correct. Hydro disclaims any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
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