SSE sells £621m Scotia Gas stake to Abu Dhabi

Perth-based energy giant SSE said it agreed to sell a 16.7% equity stake in Scotia Gas Networks (SGN) to the Abu Dhabi Investment Authority (ADIA) for about £621 million in cash. 

SSE acquired a 50% equity stake in gas distributer SGN in 2005 for £505 million.

The Perth company will retain a 33.3% equity stake in SGN. 

SSE said it expects to use the proceeds “to return value to its shareholders or to invest to create value for shareholders, should there be the right opportunity.”

It said it will set out its intentions for the proceeds in its interim results on November 9.

SGN owns and operates two networks which distribute gas to almost six million properties in Scotland and the South of England.

SSE said that since 2005, SGN had become a leading gas distribution business earning fair returns for its investors, including dividend payments and other distributions to SSE totalling over £750 million.

SSE CEO Alistair Phillips-Davies said: “Over the last decade, SGN has become a leading gas distribution business for the benefit of customers and investors alike. 

“The sale of a 16.7% stake confirms SSE’s ability to deliver value for shareholders through focused, timely disposals while at the same time retaining a diverse range of regulated and unregulated businesses in order to support long term dividend growth. 

“We look forward to working with all of SGN’s shareholders to support the continued success of the business in meeting the needs of customers and earning a return for investors.”