Construction work for the expansion of International Power's Jirau hydro project in Brazil has been halted as a result of an illegal strike by 16,000 workers.
Nevertheless, the news didn't seem to scare off investors today, who poured into the stock after it announced that it had received an approach from GDF Suez for the remaining 30% that it does not already own.
"Although the strike was ruled illegal by the Labour Justice of Brazil, the industrial action has continued. The timing of the strike is close to the annual wage renegotiation period and the industrial action is not isolated to the Jirau project," the company said. It assures that it has nothing to do with negotiations with unions as it is the responsibility of the construction contractor and other contractors.
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International Power owns 50.1% of the project company Energia Sustentavel do Brasil (ESBR) which is building the 3,750MW gross hydro project on the Madeira River in Brazil. Its net ownership represents 1,897MW of capacity. It is the largest hydro power project currently under construction in the world.
The company said last month that the phased commissioning of units at this project is expected to start in the second half of the year, with a fast ramp-up to full assured energy in the second half of 2013.
Shares finished the day 5.6% higher at 405p.
BC
