28th Mar 2022 08:04
(Alliance News) - National Grid PLC on Monday said it agreed to sell 60% interest in its gas transmission and metering business in the UK to a consortium of "long-term infrastructure investors" for GBP2.2 billion in cash.
The London-based electricity and gas utility company said the consortium includes Sydney-based asset manager Macquarie Asset Management and Victoria, Canada-based investment management firm British Columbia Investment Management.
The deal implies an enterprise value of GBP9.6 billion for the entire business, which National Grid calls NGG.
Following the transaction, National Grid will own a 40% minority equity interest in NGG through a new holding company called 'GasT TopCo'.
Additionally, National Grid will receive roughly GBP2.0 billion from additional debt financing at completion, the FTSE 100 company explained.
National Grid also has entered into an option agreement with the consortium for the potential sale of the remaining 40% of equity in GasT TopCo. The option can be exercised by the consortium between January 1, 2023 and June 30, 2023, it said.
If the option is exercised, the payment for the further 40% interest is expected to be paid in cash to National Grid on similar terms to the first 60%.
The sale is part of National Grid's strategy to pivot towards electricity and follows last year's acquisition of power-distribution company Western Power Distribution for GBP7.8 billion.
"This transaction further enhances our role in delivering the UK's energy transition, pivots our portfolio towards electricity, whilst ensuring the security of the energy supply for the country. Alongside our plans to invest up to GBP35 billion in energy infrastructure over the next five years, the series of transactions announced last March will strengthen our long-term growth prospects, and drive long-term value for shareholders," Chief Executive John Pettigrew said.
Pantheon Infrastructure PLC, separately, said that it agreed to invest GBP40 million alongside the Macquarie Asset Management-led consortium for the 60% stake in National Grid's NGG unit.
The London-based global infrastructure fund noted that this is in line with its strategy to build a diversified portfolio of global infrastructure assets.
Pantheon Infrastructure said in another statement on Moday that it invested in the take-private of data centre business CyrusOne through a KKR & Co Inc-affiliated investment vehicle. Its portion of the net asset value of the vehicle is GBP21 million.
Shares in National Grid were down 0.9% at 1,117.00 pence each on Monday morning in London. Pantheon Infrastructure shares were trading 0.5% higher at 107.50 each.
By Abby Amoakuh; [email protected]
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