SSE to sell 16.7% in Scotia Gas Networks to Abu Dhabi's sovereign wealth fund for £621 mn

British energy company SSE yesterday struck a deal to sell a 16.7-per cent stake in Scotia Gas Networks (SGN) to Abu Dhabi's sovereign wealth fund for £621 million ($755.29 million) in cash.

Scotland-based SSE will sell the stake in SGN to wholly-owned subsidiaries of the Abu Dhabi Investment Authority, the sovereign wealth fund owned by the Emirate of Abu Dhabi.

SSE, which acquired a 50-per cent stake in SGN in 2005 for £505 million, said that it will hold a 33.3- per cent stake in SGN post completing the stake sale.

SSE had in May said that it would conduct a review of its stake in SGN and expected the review to close by the end of October.

SSE said that it would use the proceeds of the sale ''to return value to its shareholders or to invest to create value for shareholders.''

"The sale of a 16.7-pc 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," said Alistair Phillips-Davies, CEO of SSE.

Horley-based SGN is a gas distribution company that manages and provides natural and green gas to about six million homes and businesses across Scotland and the south of England. It also owns and operates two economically-regulated networks, also undertakes other gas-related commercial activities.

Following completion of the sale, and including its remaining equity stake in SGN, SSE will have an ownership interest in five economically-regulated energy networks with an estimated total value of over £7 billion.