SSE PLC AGREEMENT TO DISPOSE OF 16.7% STAKE IN SGN (6594M)
October 17 2016 - 2:00AM
UK Regulatory
TIDMSSE
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 GBP621m 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
GBP505m. 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 GBP750m. 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 GBP7bn (SSE share). Through
continuing investment, this is expected to increase to almost
GBP8.5bn 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 GBP5.0bn
External Debt GBP3.6bn
This information is provided by RNS
The company news service from the London Stock Exchange
END
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