![]() And that will be achieved at the lowest cost to customers. ![]() Therefore, acceptance of the deal now is a big positive. The directors said the price controls will accelerate the delivery of smart, decarbonised electricity distribution networks in the UK. And they wanted to make sure they incentivised the company to make sufficient investment into its networks. Previously, the National Grid directors said they’d consider the Final Determination of the controls. And those controls balance the relationship between investment in the network, company returns, and the amount firms can charge for operating their networks. The UK energy regulator sets price controls for gas and electricity network companies. On 3 March, the company announced its acceptance of Ofgem’s RIIO-ED2 network price controls. And a further clue arrived recently to suggest the shareholder dividend may remain secure. The tilt further towards higher-growth electricity assets is positive. With the US business accounting for around 40% of assets overall. The most recent big divestment occurred in late January when the company finalised the sale of a 60% equity interest in its UK gas transmission and metering business.Īfter those changes, National Grid has around 70% of its assets in electricity infrastructure and 30% in gas. And last year it sold its US Rhode Island electricity and gas business. For example, in 2021, it acquired Western Power Distribution, the UK electricity distribution business. But it’s been engaged in a strategic pivot towards higher-growth electricity assets.Īnd to do that, it’s been buying and selling businesses. National Grid's stock initially dropped by about 2.5% in early morning trading on the London Stock Exchange, before recovering slightly.The company transmits and distributes electricity and gas. National Grid expects to launch the sales process in the second half of 2021 and complete the deal approximately a year later. NGG had approximately 7,630 kilometers of pipeline and a workforce of nearly 2,200 employees as of March 31, 2020. ![]() National Grid hired Barclays, Goldman Sachs and Robey Warshaw as joint financial advisers, and Herbert Smith Freehills LLP and Cravath Swaine & Moore LLP as lead legal advisers.Īlong with these deals, National Grid announced that it will look to sell a majority stake in National Grid Gas PLC, which owns and operates Britain's gas transmission network, as part of its strategic portfolio repositioning toward electricity. Morgan Securities LLC as sole financial adviser and Skadden Arps Slate Meagher & Flom LLP as legal adviser on both transactions, while Ashurst LLP served as its legal adviser on the U.K. National Grid plans to fund the deal with fully committed bridge facilities. and the U.K., as well as National Grid shareholder approval for the WPD deal. The sale of WPD is expected to close within four months and the acquisition of Narragansett Electric within a year, subject to customary approvals in the U.S. The company also expects its holding company debt-to-total debt ratio to decrease below 25%. PPL is targeting a cash from operations-to-total debt ratio of 16% to 18% following the transactions. utilities strengthen our credit metrics enhance long-term earnings growth and predictability and provide us with greater financial flexibility to invest in sustainable energy solutions for those we serve," said PPL President and CEO Vincent Sorgi.Īt the closing of the deals, PPL will serve approximately 3.5 million electricity and gas customers in the U.S., including approximately 780,000 customers from Narragansett Electric's electricity transmission and distribution and gas distribution businesses in Rhode Island. " will refocus our business mix squarely on strong, rate-regulated U.S. Net proceeds will also be used to further PPL's balance sheet and enhance opportunities for strategic growth, including potential investments of incremental capital at its utilities or in renewables and in repurchasing shares. for $3.8 billion, plus the assumption of approximately $1.5 billion of debt. The transaction, valued in total at £14.4 billion, is expected to result in net cash proceeds of approximately $10.2 billion for PPL, reflecting taxes and fees and based on a foreign-currency exchange rate of $1.35 to the pound.Ī portion of the proceeds will be used to finance PPL's acquisition of National Grid's Rhode Island utility Narragansett Electric Co. electricity distribution business Western Power Distribution PLC to British utility National Grid PLC for £7.8 billion in cash, plus the assumption of approximately £6.6 billion of debt.
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