Shaw chief hunting for energy acquisitions
Posted By Admin on September 9, 2011
NEW YORK (Reuters) – Engineering and construction company Shaw Group (SHAW.N) is looking for acquisitions to diversify its energy business once it divests its stake in Westinghouse Electric Co, Shaws chief executive said on Tuesday.
It is hunting time for Shaw, CEO JM Bernhard, who is also Shaws chairman and president, told a conference call.
Earlier on Tuesday, Shaw said it would sell its 20 percent stake in nuclear power plant company Westinghouse Electric back to Japans Toshiba Corp (6502.T) to eliminate nearly $1.7 billion of debt and strengthen its balance sheet.
That will allow US company to continue the pursuit of new energy businesses amid the current weak market valuations, Bernhard said.
Youre looking at (a company) today with $1.2 billion in cash, no debt, clean balance sheet, good backlog, a lot of recurring revenue. We think were in good shape, and it looks like the market (for assets) has deteriorated out there, he said.
The company has been searching for acquisitions but has not yet found an attractive target, according to Chief Financial Officer Brian Ferraioli. With its stronger balance sheet, Shaw could tap into debt markets for a purchase, he said.
Shaw is currently one of the worlds largest builders of nuclear, fossil fuel and hydroelectric power plants, as well as facilities for the oil and gas and refining industries.
The company also said it was looking at several new significant coal projects for its power business in Southeast Asia, but declined to disclose details.
Shaw shares surged 7 percent to $23.38 in midday trade on the New York Stock Exchange.
(Reporting by Matt Daily; editing by John Wallace)
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