1st May 2018 08:31
LONDON (Alliance News) - National Grid PLC said Tuesday it proposed to sell its remaining 25% stake in the Cadent gas distribution network business for a further GBP1.2 billion to a consortium, as consortium member International Public Partnerships outlined its own commitment.
The FTSE 100 electricity and gas infrastructure firm will sell its remaining stake in Quadgas HoldCo Ltd - the holding company for Cadent Gas Ltd - to the investment vehicle of a consortium, Quadgas Investments Bidco Ltd.
The potential sale is at the option of National Grid and the consortium any time between the start of March and the end of October 2019.
Should the sale complete, National Grid will receive GBP1.2 billion in cash. Any cash proceeds will be retained for reinvestment in the business, National grid emphasised.
The potential sale follows National Grid selling a 61% take in Cadent Gas to the Quadgas consortium. National Grid and the consortium have also previously negotiated the potential sale of a further 14% stake in Cadent.
Shares in National Grid were 0.4% higher at 846.00 pence on Tuesday.
International Public Partnerships Ltd - one of the consortium members - also said on Tuesday its potential cash commitment for the new deal will be between GBP35 million and GBP40 million.
"The pricing for this further acquisition has not been disclosed on account of there being a number of factors feeding into the final price but the company confirms that this further investment is forecast to be accretive to the company's current portfolio in terms of discount rate, yield contribution and inflation indexation," International Public Partnerships said in a statement.
International Public Partnerships initially invested GBP274 million in the consortium to get its stake. At the conclusion of the current options and the taking of an 100% stake in Cadent by the consortium, International Public Partnerships will have 7.25% interest in Cadent and have a permanent right to appoint a Cadent board director.
In a separate announcement, International Public Partnerships also said it had made good progress in replacing insolvent support services firm Carillion PLC as facilities manager at 22 of its 24 facilities which had used Carillion and its subsidiaries for such services. Of these 22, 14 new facilities contracts are permanent and eight are on an interim basis with an expectation to becoming permanent.
At the remaining two facilities, services are still being provided by Carillion's liquidator and commercial terms for the transfer of services have been agreed. Local authority consent, however, is still being awaited.
Shares in International Public Partnerships were trading flat at 145.00 pence on Tuesday.
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