National grid reviews south American ventues

National Grid, the high voltage power line operator, admitted today it may pull out of its troubled telecoms ventures in South America.

The group said that while its UK and US electricity divisions were performing in line with expectations, it was suffering from the telecoms downturn.

Its Silica joint venture in Argentina had launched into ‘‘a very challenging economic climate’’ and its Brazilian business Intelig, which it jointly owns with US group Williams, was facing tough market conditions.

‘‘Against this background, the company is reviewing its options for these ventures with its partners,’’ National Grid said.

The group expanded into South America in 1999, two years after it floated off its UK telecoms business Energis.

A spokesman said the review would determine the role National Grid played in South America and would ‘‘look at the full range of options’’.

He added, however, the group was keen to remain in telecoms. It recently appointed a full-time board member to head up the division, Edward Astle.

‘‘The review will determine where we should be and whether the markets we are in are the right ones,’’ he added.

In a pre-close statement, National Grid said its share of the losses in Brazil would be down ‘‘significantly’’ to under £30m at the half-year stage.

Results from the group’s core UK and US electricity operations would be in line with City expectations.

It added the acquisition of Niagara Mohawk, a US electricity business in New York state, should be completed by the end of the year.

The deal would make National Grid the ninth largest utility in the US.