SSE has agreed to sell its entire 33.3% stake in gas distribution operator Scotia Gas Networks Ltd (SGN) as the power producer shifts focus to developing renewable infrastructure.
The sale, worth £1,225 million ($1,70 million), was concluded with a consortium comprising existing SGN shareholder Ontario Teachers’ Pension Plan Board and Brookfield Super-Core Infrastructure Partners and is expected to be complete within the current financial year.
This deal will conclude SSE’s £2 billion ($2.78 billion) disposals programme announced in June 2020, which has intensified SSE’s strategic focus on its core low-carbon electricity businesses and the transition to net zero. The disposal proceeds will reduce net debt in the short term and will help support the delivery of SSE’s capital investment plans.
SSE has set out plans to invest in low-carbon energy infrastructure over the next five years and treble its renewable electricity output by 2030 as it transitions to net zero.
Gregor Alexander, Finance Director of SSE, said: “It has become purely a financial investment for SSE as we have sharpened our focus on our low-carbon electricity core, and it is therefore the right time for SGN to continue to thrive under new ownership.
“We see significant growth opportunities in our core networks and renewables businesses in the transition to net zero and the capital we are releasing through our disposals programme will help enable us to maximise the delivery of our low-carbon electricity orientated strategy and ultimately create sustainable long-term value for customers, shareholders and society.
“Completion of our disposals programme will leave SSE more streamlined and strategically aligned than ever before, with a business mix that is very deliberate, highly effective, fully focused and well set to prosper on the journey to net zero and beyond.”
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.
Morgan Stanley and Credit Suisse acted as financial advisers and CMS Cameron McKenna Nabarro Olswang LLP as legal advisers to SSE