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National Grid to sell stake in gas business, return £4bn to shareholders

Staff Writer |
National Grid is to sell a 61% stake in its gas distribution business to a consortium of investors for about £3.6bn and then return £4bn to shareholders.

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National Grid has agreed to sell its interest in the gas distribution business, subject to approval from the European Commission, to a group of investors consisting of Macquarie, Allianz Capital, Hermes Investment Management, CIC Capital, Qatar Investment Authority, Dalmore Capital, Amber Infrastructure, and International Public Partnerships, which will provide £275m, for £3.6bn in cash by the end of March 2017.

It will retain a 39% minority stake in the new holding company for the business and receive £1.8bn from additional debt financing.

Following the sale the company is to return £4bn, 75% of which will be through a special dividend in the second quarter of 2017 and a share buy-back scheme. It will also distribute £150m to benefit energy consumers.

Net proceeds are from retaining £700m of the additional debt financing, in order to maintain the 39% stake in the new holding company, and after deduction of £500m worth of costs.

The company said that it, along with consortium, will consider selling an additional 14% stake in the gas distribution in the future.

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