SSE has agreed to sell its 33.3% stake in the gas distribution company Scotia Gas Networks (SGN) for £1.2 billion.
A Canadian consortium made up of the independent school teacher pension organisation Ontario Teachers’ Pension Plan Board and the infrastructure investor Brookfield Super-Core Infrastructure Partners will take ownership of the share.
Proceeds from the transaction are predicted to reduce SSE’s net debt in the short term and support the firm’s investment plans.
In 2005, SSE acquired a 50% share in SGN for a total of £505 million and 11 years later sold a 16.7% stake to a subsidiary of the Abu Dhabi Investment Authority (ADIA).
The consortium has also agreed to acquire the 16.7% stake in SGN owned by ADIA.
SGN manages a network that distributes natural and green gas to approximately 5.9 million homes and businesses across Scotland and the south of England.
Gregor Alexander, Finance Director of SSE, said: “We see significant growth opportunities in our core networks and renewables businesses in the transition to net zero and the capital we are releasing through our disposals programme will help enable us to maximise the delivery of our low carbon electricity orientated strategy and ultimately create sustainable long-term value for customers, shareholders and society.”