SSE PLC has sold a 25% stake in its energy transmission grid unit for $1.8 billion (£1.5 billion) to Ontario Teachers’ Pension Plan Board.
The London-listed SSE revealed the plans for a portion of its stake in the distribution and transmission grid businesses to generate funding for net-zero infrastructure projects last year. According to Bloomberg News, the assets might be worth upwards of $12 billion (£10 billion) in any purchase.
SSE to sell part of its electricity distribution business
The network facilitates the movement of renewable resources from Scotland’s northern regions to demand areas in the south. Additionally, SSE is offering a share in its energy distribution business. According to a release, the operation is anticipated to start in early 2023.
The share sale is part of the business strategy SSE presented after rejecting activist investor Elliott Investment Management’s proposal to divide the firm by splitting the renewables division.
SSEN Transmission Managing Director Rob McDonald said,
With significant growth forecast in transmission, bringing in Ontario Teachers’ as a minority stake partner will help fund our ambitious investment plans.
According to the release, Freshfields Bruckhaus Deringer LLP served as SSE’s legal representative, and Morgan Stanley and Rothschild served as its financial consultants on the deal. In addition, Evercore provided financial advice to Ontario Teachers’, and Linklaters LLP provided legal counsel.
Ontario Teachers agreed last year to pay £1.2 billion for natural gas system
Last year, a partnership supported by Brookfield Super-Core Infrastructure Partners and Ontario Teachers agreed to pay £1.2 billion for SSE’s outstanding interest in a Scottish natural gas system.
A revolving credit line of £750 has been established to aid the network firm with its working capital and long-term financial requirements.
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