SCANA announces sale of two subsidiaries for $650 million
CGT is SCANA's FERC-regulated open access, transportation-only interstate pipeline company whose system consists of approximately 1,500 miles of pipe measuring up to 24 inches in diameter operating in South Carolina and southeastern Georgia.
SCI owns and operates a 1,125 mile fiber optic telecommunications network and Ethernet network and provides tower site construction, management and rental services in South Carolina, North Carolina and Tennessee.
Both of these transactions, which are subject to customary closing conditions, are expected to close in the first quarter of 2015.
"In recent years, we have focused our efforts on the delivery of energy-related products and services through the core retail businesses of our company," said Kevin Marsh, SCANA's Chief Executive Officer.
"While CGT and SCI have been very successful members of the SCANA portfolio, they are principally wholesale operations and comprise approximately 2% of our total assets. These transactions will further confirm our commitment to serving our retail customers." Marsh added,
"Once we decided to pursue divestiture, we made it central to our strategy to retain as many jobs as possible in the local market. We are very pleased that the employees of CGT will be retained by Dominion and most of SCI's will be offered jobs with Spirit. We also negotiated a three-year rate moratorium with Dominion so that CGT's transportation rates will not increase during this period."
"We are very pleased with these transactions, as the results will yield significant value for our existing shareholders," said Jimmy Addison, SCANA's Executive Vice President and Chief Financial Officer.
"We expect aggregate proceeds, net of income taxes, to be in excess of $400 million. Once the net proceeds have been deployed to displace previously planned equity issuances, the transactions will be accretive to earnings." ■