Jersey Electricity Company Limited
13 January 2004
The Jersey Electricity Company Limited
POSSIBLE OFFER FOR
JERSEY NEW WATERWORKS COMPANY LIMITED
BY THE JERSEY ELECTRICITY COMPANY LIMITED
The Board of The Jersey Electricity Company Limited (JEC), announces today, 13th
January, 2004, that it has made a preliminary approach to Jersey New Waterworks
Company Limited (JNWW) which may lead to an offer being made by JEC for the
issued share capital of JNWW.
If it proceeds, the acquisition would enable JEC to provide Jersey's water
industry with greater financial strength to safeguard the future availability,
quality and affordability of water supplies, and ensure that ownership of the
water industry remains in local hands.
JEC's Managing Director, Mike Liston, said: 'The water industry in Jersey, as
elsewhere, is facing substantial investment costs to tackle the threats of water
shortages caused by increasing demand and changing rainfall patterns,
legislation on water purity, ageing water distribution infrastructure, and
environmental constraints on the development of new water sources.'
'As it stands, JNWW's future will, in our view, inevitably be affected by a
number of circumstances, including its requirement to fund necessary
infrastructure investments given its already high borrowings, and the possible
appeal to the States of Jersey, which has had to underwrite JNWW's debts, of
divesting itself of its holding in JNWW,' he added.
The acquisition, if successful, would allow the States to retain control of this
vital water service through its current 62% shareholding in JEC.
The JEC has a proven track record of commitment to infrastructure investment,
cost competitiveness, reliability and environmental responsibility. It takes
pride in having invested more than £100M during the past 10 years in its
electricity system, which is now capable of importing all the Island's needs
from Europe - where the company 'shops for' the cheapest and cleanest power
available - but retains the strategic independence of its own power generating
capacity in Jersey.
JEC believes the complementary nature of the two organisations offers
opportunities for cost savings in the administration of the businesses and the
management of infrastructure.
JEC acknowledges that some cost savings would involve job losses but cannot
confirm how many at this time. A clearer picture will not emerge until the terms
of any offer, if progressed, have been finally negotiated and accepted by the
shareholders of both organisations.
Mr Liston said: 'Any Waterworks staff worried about their jobs should be
comforted by the reputation we've built for responsible behaviour as we've
steadily reduced our own workforce by one-third over the past 10 years - we
still enjoy good industrial relations having always consulted honestly and
fairly with our staff and their unions and offering generous redundancy
JEC can confirm that although not yet in place, it will comply in principle with
the requirements of the Jersey Competition Law and expects it will have no
difficulty in demonstrating to the Jersey Competition Regulatory Authority
(JCRA) that the acquisition is in the best interests of both water and
A further announcement will be made as soon as practicable.
For further information contact, Mike Liston, Managing Director of Jersey
Tel: 01534 505320
P J ROUTIER
Direct Tel: 01534 505253
Direct Fax: 01534 505515
13th January, 2004
PO Box 45
This information is provided by RNS
The company news service from the London Stock Exchange