Northumbrian Water fear over threats to Corus

Feb 3 2010 by Sue Scott, Evening Gazette

NORTHUMBRIAN Water, which yesterday saw shares rocket on the back of take-over rumours, could take a multi-million pound hit if Corus follows through on plans to mothball its Redcar site.

But news that the former Artenius plastics plant at Wilton, which earned the utility £6m, had been bought out of administration will leave the balance sheet roughly stable.

Northumbrian, which has remained tightlipped over speculation that the Canadian Ontario Teachers’ Pension Fund is preparing a £1.7bn bid, said performance was broadly in line with expectations as it published its interim management statement on Monday.

But it admitted that it was braced for a loss, on the back of Corus results, due to be announced on February 16. It is likely that the future of the steel plant, which is both supplied by Northumbrian and discharges effluent to the Bran Sands treatment works, will be made clear at that point.

Northumbrian’s non-household services have been under severe pressure this year as the downturn saw both water consumption and dirty water treatment volumes hit by falls in production, particularly at the Wilton chemical complex.

It has already factored in a £6m bad debt charge incurred by the then Spanish owned Artenius plastics plant.

A spokesman for Northumbrian said: “The fact that the Artenius situation has been resolved is a bonus, while Corus is a potential negative. They more or less even out.”