Dresdner Kleinwort Benson, an international investment bank, and the Norwegian based company Ernst & Young Corporate Finance have executed independent value assessments of Statkraft SF, as part of the ownership supervision of Statkraft SF by the Ministry of Petroleum an Energy. The assessments are based on available public information.

Olav Akselsen, Minister of Petroleum and Energy, stated that the value assessments confirm the Ministry's impression of Statkraft as a well-run company. Even though power prices have dropped for several years, the contributed capital has provided a satisfactory rate of return. Minister Akselsen emphasises that the assessments are executed in order to enhance the Ministry's ownership supervision. The Ministry aims to carry out these assessments regularly, according to Mr. Akselsen. Furthermore, the Minister acknowledges the positive feedback from the consultants, concerning the Statkraft strategy on an active participation in the power industry's reconstruction.

Ernst & Young Corporate Finance estimates the Statkraft equity market value to be NOK 45 to 50 billion.

Dresdner Kleinwort Benson's estimate is NOK 27 to 33 billion, presupposing a stock exchange listing. By selling to an industrial investor, the company estimates the added value to be 20 per cent, in other words a value estimate of NOK 32 to 40 billion. It is more relevant to the state, as the owner, to emphasise on the latter value estimate.

Both companies' estimates are considerably above the book value of the equity-shares, which constitutes approximately NOK 22 billion, as of 30 June 2000.

In addition to assessing the market value of the equity-shares, the consultants provide quality assessments of the Statkraft operation. Ernst & Young Corporate Finance note how the limited investments in new hydro power, and the signing of long-term power contracts in the 1990s, have been very successful for Statkraft in relation to the current market situation.

The Ministry judges the commercial evaluation to be in support of the Statkraft strategy of participating actively in restructuring the power market, taking fully advantage of their competence, as well as accomplishing economies of scale within power production and wholesale trade. The consulting firms note that in order to obtain economies of scale, Statkraft and their shareholder companies need to obtain considerable consolidation in down-stream activities (grid- and end-user sales).

The reports can be obtained from the Norwegian Ministry of Petroleum and Energy. However, the report from Dresdner Kleinwort Benson is in the print, and will be available within a week's time.