SSE plc (LON: SSE) announced Friday that it has agreed to sell a 25% stake in its electricity transmission network business to Ontario Teachers' Pension Plan Board for £1.465 billion.
YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.
The company's transmission business, SSEN Transmission, operates under Scottish Hydro Electric Transmission plc, its licenced entity.
SSE shares opened Friday's session higher on the news, at 1,760.5p, after closing Thursday at 1,732.5p. However, it is currently at 1,740.5p, up 0/46% on the day.
The company said the deal reflects the value and “significant growth potential” of SSEN Transmission, and it believes SSEN Transmission has a central role to play in bolstering the UK's energy security.
The proceeds will be used by SSE to support the growth of the transmission business and boost opportunities across SSE's other core businesses.
SSE will retain operating and managing control of the transmission business, with Ontario Teachers represented on its Board. SSE's Finance Director Gregor Alexander will be Chair of the new Board, with Rob McDonald continuing as Managing Director for SSEN Transmission.
The company stated that to help cover the future long-term funding requirements and working capital of SSEN Transmission, a new £750 million revolving credit facility has been put in place to support SSEN Transmission's ongoing capital expenditure investment programme.
The deal is expected to be completed “shortly.”
“We are delighted to agree a transaction that will help unlock the full potential of our growing electricity transmission business, which remains core to our strategic direction as a clean energy champion specialising in electricity infrastructure,” said Gregor Alexander, Finance Director of SSE.