SSE has agreed to sell a 25 per cent 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 centres further south. SSE is also selling a stake in its electricity distribution business. The process is expected to begin in early 2023.
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 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.
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SSE’s financial advisers on the transaction were Morgan Stanley and Rothschild, and its legal adviser was Freshfields Bruckhaus Deringer. Ontario Teachers’ was financially advised by Evercore and legally by Linklaters.
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 long-term funding requirements and the working capital of networks business, a £750 million revolving credit facility has been put in place. – Bloomberg
