Vattenfall AB is in intense, binding talks with more than one buyer for its German power transmission grid, the Swedish utility's chief executive said in an interview as the group aims to improve its cash flow by selling non-core assets.

Vattenfall Europe's power grid sale has faced delays due to the financial crisis and regulatory concerns over its revenue parameters since announcing the divestment in July 2008. But talks are now moving and Chief Executive Lars Josefsson told Dow Jones Newswires that Vattenfall should find a successful bid in the third quarter and close the deal in the fourth.

"We're talking real things now, we're talking binding things," he said.

According to people familiar with the situation, only one of three potential buyers actually bid in the final round May 4. One person said the bidding consortium, comprising Allianz SE (AZ), Deutsche Bank AG's (DB) RREEF Alternative Investments and Goldman Sachs Group Inc. (GS), likely submitted an "expression of interest" only, rather than a binding bid, due to a lack of information on the business' capital expenditure plan.

Belgium's Elia System Operator SA (ELI.BT) and an unnamed infrastructure fund have been singled out as the two other potential buyers. Josefsson declined to name the parties.

Company Web site: www.vattenfall.com

-By Anna Molin, Dow Jones Newswires; +46 8 545 130 91; anna.molin@dowjones.com