Renewable electricity company SSE plc (SSE.L) Monday said it has agreed to sell its entire 33.3 percent stake in gas distribution operator Scotia Gas Networks Ltd or SGN for 1.225 billion pounds in cash.
The stake is being sold to a consortium comprising existing SGN shareholder Ontario Teachers’ Pension Plan Board and Brookfield Super-Core Infrastructure Partners.
SGN includes Scotland Gas Networks plc and Southern Gas Networks plc, two of the eight regulated gas distribution networks in England, Wales and Scotland, in addition to SGN Natural Gas Ltd, which provides gas to customers in the west of Northern Ireland as well as other non-regulated ancillary businesses.
The transaction is based on an effective economic date of March 31, 2021. It is expected to complete within the current financial year and is conditional on certain regulatory approvals.
SSE initially acquired a 50 percent equity share in SGN in 2005 for a total of 505 million pounds, but later sold 16.7 percent stake to Abu Dhabi Investment Authority or ADIA;s unit in 2016.
The Consortium has also agreed to acquire the 16.7 percent stake in SGN owned by ADIA.
In total, Ontario Teachers’ will acquire an additional 12.5 percent of SGN and Brookfield will acquire a 37.5 percent stake in SGN. StepStone Clients are participating in both the Brookfield and Ontario Teachers’ investments.
SSE noted that the latest sale will conclude its 2 billion pounds plus disposals programme announced in June 2020, with total proceeds amounting to over 2.7 billion pounds.
The disposal proceeds will reduce net debt in the short term and will help support the delivery of SSE’s capital investment plans.
SSE will provide an update on these plans at its interim results in November.
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