SSE Sells 25% Stake in UK Networks Business for £1.5 Billion
(Bloomberg) -- SSE Plc has agreed to sell a 25% stake in its electricity transmission grid business to the Ontario Teachers’ Pension Plan Board for about £1.5 billion ($1.8 billion).
The network helps transport renewable resources in the north of Scotland to demand centers further south. SSE is also selling a stake in its electricity distribution business. The process is expected to commence in early 2023, according to a statement.
The stake sale is part of a strategic plan unveiled by SSE after it rejected a proposal from activist investor Elliott Investment Management to split the company in two by separating the renewables business.
“With significant growth forecast in transmission, bringing in Ontario Teachers’ as a minority stake partner will help fund our ambitious investment plans,” said Rob McDonald, Managing Director of SSEN Transmission.
SSE’s financial advisors on the transaction were Morgan Stanley and Rothschild, and its legal advisor was Freshfields Bruckhaus Deringer LLP, according to the statement. Ontario Teachers’ was financially advised by Evercore and legally by Linklaters LLP.
A consortium backed by Ontario Teachers and Brookfield Super-Core Infrastructure Partners agreed last year to buy SSE’s remaining stake in a Scottish natural gas network for £1.2 billion.
To help cover the future long term funding requirements and the working capital of networks business, a £750 million revolving credit facility has been put in place.
(Updates with details on advisors in fifth paragraph.)
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