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Centrica’s Back of the Sofa Moment

centrica logoBeleaguered Big 6 energy supplier Centrica like a desperate householder searching down the back of the sofa for spare change is hurriedly looking for exit opportunities from some its less economic generation portfolio.

Fresh from its second profit warning in 12 months Centrica is looking to dispose of its Langage, South Humber Bank and Killinghome facilities as the returns available from gas plants remain under pressure.

The generation investment environment is such that even in the event of a successful disposal Centrica are believed to be facing a significant write down in the value of their investments.

A commentator revealed:

“They want about £500 million but, when you really look, it is nearer the range of £250 million to £350 million altogether. That is a pretty big gap and Centrica won’t want to take the write-down.”

The latest disposals come after its sale of its Texas gas plants for £420m as well as a transaction involving their Norfolk based offshore wind farm.

Centrica are justifying the scope and timing of the sale by promising investment into “higher margin activities”, whether these investments offset the predicted write downs remain to be seen.

As if the profit warning (number two) hadn’t told us already, this isn’t an auspicious time for the self styled leader of the Big 6.