By Yadarisa Shabong and Pushkala Aripaka
-Britain’s SSE on Monday agreed to sell its entire 33.3% stake in Scotia Gas Networks (SGN) for 1.225 billion pounds ($1.70 billion) as the power producer sharpens its focus on renewables and low-carbon electricity.
A Canadian consortium of Ontario Teachers’ Pension Plan Board and Brookfield Super-Core Infrastructure Partners will buy SSE‘s stake in SGN, which supplies gas in England, Wales, Scotland and the west of Northern Ireland.
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.
It said in May it was on track to invest 7.5 billion pounds in low-carbon projects up to 2025.
The SGN deal concludes SSE‘s more than 2 billion pound disposal programme and the sale is expected to complete within the current financial year, the company said.
“The capital we are releasing through our disposals programme will help enable us to maximise the delivery of our low-carbon electricity orientated strategy,” said SSE Finance Director Gregor Alexander.
Proceeds from the SGN sale will be used to cut net debt in the short term and support investment plans, the London-listed utility said, adding that it would provide an update with its interim results in November.
SSE shares rose 1.8% in morning trade.
SSE acquired a 50% share in SGN in 2005 for 505 million pounds ($702.30 million), before selling a 16.7% stake to a unit of the Abu Dhabi Investment Authority (ADIA) in 2016.
SSE said on Monday the Canadian consortium has also agreed to acquire the ADIA stake for an undisclosed amount.
Morgan Stanley and Credit Suisse acted as financial advisers to SSE and Nomura acted as financial adviser to ADIA. Evercore acted as financial adviser to Ontario Teachers’.
($1 = 0.7191 pounds)