In an expensive about turn, Air Products is to exit the waste to energy sector and off-load its two trouble hit 50 MW plasma gasification plants on Teesside, North East England.
The company said that the decision was due to technical difficulties in making the technology work as expected.
Construction work on the second of the two facilities was suspended back in November 2015 as it became apparent that there were going to be operational challenges in making the facility function correctly.
The first of the two plants, TV1, had been undergoing testing and analysis during the Company’s fiscal second quarter. However, the results indicated that additional design and operational challenges would require significant time and cost to rectify.
Consequently, the Board of Directors have decided that it is no longer in the best interest of the Company and its shareholders to continue the Tees Valley waste to energy projects.
As a result, the company said that its Energy from Waste business segment will be accounted for as a discontinued operation effective in the its second fiscal quarter.
Also in the second quarter, Air Products said that expects to record a pre-tax charge in the range of $900 million to $1.0 billion in discontinued operations, primarily to write down assets associated with the Energy from Waste business to their current realisable value.
Air Products said that it will work to optimise the cash value of the investments, but expects a modest future cash tax benefit from the write-off.
The company added that exiting the Energy from Waste business will allow it to direct its resources to its core business of Industrial Gases.
“Air Products is focused on our core Industrial Gas business. We pushed very hard to make this new EfW technology work and I would like to thank the team who worked so diligently,” said Seifi Ghasemi, chairman, president and CEO of Air Products.
“We appreciate the hard work of our employees and contractors at the site, and certainly understand their disappointment in this decision. We are also disappointed with the outcome,” concluded Ghasemi
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