LONDON - British low-carbon project developer Camco International Ltd said it would sell its UK advisory business to Baxi Partnership for £4.5 million ($US6.9 million), a move analysts say will help it raise cash in the face of record-low carbon prices.

"The UK advisory business was considered to be outside the company's core business of clean energy project development and carbon," Camco said on Monday. "The cash raised as part of this transaction will be used to grow these businesses in its key geographic markets."

The company added it would continue its advisory business in Africa and provide certain advisory services globally outside the UK.

Camco Advisory Services Limited, which employs 58 people, reported a net pretax profit of 500,000 pounds in 2010.

Camco develops clean energy projects under the U.N.'s Clean Development Mechanism (CDM), receiving offsets called certified emissions reductions (CERs) in return.

The benchmark contract for CERs fell to a fresh record low of 3.30 euros a tonne in early trade on Monday.

CER prices have shed some 70 percent since the end of 2010, weighed down by flagging demand amid growing worries about the euro zone's debt crisis and a record issuance of carbon credits.

Shares in Camco were up nearly 5 percent at 8.0 pence at 1127 GMT on Monday in London.

Analysts at Singer Capital Markets said Camco's sale of its UK advisory business was "an entirely logical move," as it would help the firm raise cash and earn a profit on the disposal of the advisory unit.

"We leave our intrinsic value unchanged at 12.1 (pence per share) but assuming the cash is recycled into the U.S. projects business we see the potential for upgrades going forward," Ian Wild, an analyst at Singer wrote in a research note.

Camco said it would continue to leverage value from its carbon portfolio, particularly its post-2012 CER portfolio which stands at 39.9 million of risk-adjusted credits, as well as its North American carbon portfolio.

Gus Hochschild, an alternative energy equity analyst at Mirabaud Securities LLP, said that while Camco should be "sufficiently funded" to withstand record low CER prices, he was concerned about the company's pre-2013 carbon credits.

"Naturally, Camco will try and push out the deliveries of these credits. However, now that the CER price is below its acquisition cost, these credits could become a liability."

($1 = 0.7895 euros)

(Reporting by Jeff Coelho and Adveith Nair; Editing by Neil Maidment and Helen Massy-Beresford)