AGREEMENT TO DISPOSE OF 16.7% STAKE IN SGN

RNS Number : 6594M
SSE PLC
17 October 2016
 

 

SSE plc

AGREEMENT TO DISPOSE OF 16.7% STAKE IN SGN

 

SSE plc has entered into an agreement to sell a 16.7% equity stake in Scotia Gas Networks Limited ('SGN') to wholly owned subsidiaries of the Abu Dhabi Investment Authority (ADIA), for a headline consideration of £621m based on an effective economic date of 1 April 2016.  The transaction is expected to be completed by the end of this month, with the consideration being settled in cash.  The sale follows a review announced by SSE in May 2016.  SSE will retain a 33.3% equity stake in SGN. 

 

When it announced the review, SSE said that should a sale be completed it would expect to use the proceeds to return value to its shareholders or to invest to create value for shareholders, should there be the right opportunity.  SSE will set out its intentions with regard to the proceeds in its interim results statement on 9 November 2016.

 

SSE acquired a 50% equity stake in SGN in 2005 for a total of £505m. SGN owns and operates two economically-regulated networks which distribute gas to almost six million properties in Scotland and the South of England; it also undertakes other gas-related commercial activities.  Since 2005 SGN has become a leading gas distribution business demonstrating operational and investment efficiency and innovation for the benefit of customers and earning fair returns for its investors, including dividend payments and other distributions to SSE totalling over £750m.  SSE believes that SGN is in a good position to build on its track record of success in the future.

 

Following completion of the sale, and including its remaining equity stake in SGN, SSE will have an ownership interest in five economically-regulated energy networks with an estimated total Regulated Asset Value of over £7bn (SSE share).  Through continuing investment, this is expected to increase to almost £8.5bn by March 2018.

 

Alistair Phillips-Davies, Chief Executive of SSE, said:

"Over the last decade, SGN has become a leading gas distribution business for the benefit of customers and investors alike.  The sale of a 16.7% stake confirms SSE's ability to deliver value for shareholders through focused, timely disposals while at the same time retaining a diverse range of regulated and unregulated businesses in order to support long term dividend growth.  We look forward to working with all of SGN's shareholders to support the continued success of the business in meeting the needs of customers and earning a return for investors." 

 

Inside Information

This announcement is being disclosed in accordance with the Market Abuse Regulation (EU596/2014) and has been determined to contain inside information in line with the definition therein.

 

Sally Fairbairn

Company Secretary

 

Enquiries

 

Investors and Analysts           ir@sse.com

+ 44 (0)345 0760 530

Media                                        media@sse.com

+ 44 (0)345 0760 530

 

About SGN:

Key SGN metrics at 31 March 2016

Total Connections

5.9m

RAV

£5.0bn

External Debt

£3.6bn

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
DISEAFEKFADKFAF

Companies

SSE (SSE)
UK 100