National Grid Transco (NGT) has reached an agreement on the sale of four of its regional gas distribution networks for £5.8 billion. The purchasers of the distribution networks will assume certain environmental and other liabilities, which are said to amount to some £130 million.
“We will remain by far the largest UK gas distributor and the reshaped business will enable us to achieve the targeted reduction in controllable costs more effectively,” said Roger Urwin, Chief Executive of National Grid Transco.”Today National Grid Transco is in even better shape to deliver its growth strategy and superior value.”
The North of England distribution network is to be sold to a consortium led by Cheung Kong Infrastructure Holdings for a cash consideration of £1.4 billion; whilst the Wales & the West distribution network is to be sold to a consortium led by the Macquarie European Infrastructure Fund for £1.2 billion.
The South of England and Scotland distribution networks are to be sold to a consortium comprising Scottish and Southern Energy, Borealis Infrastructure Management and Ontario Teachers Pension Plan for £3.2 billion.
In addition to West Midlands, London and East of England, NGT will retain the North West distribution network.
With approximately 11 million business and home consumers, NGT says it will have the largest gas distribution business in the UK. By March 2005, NGT says the business will have an estimated regulatory asset value of £5.6 billion.
Subject to completion of the transactions, NGT will deliver a one-off return of capital to shareholders of £2 billion.