Scotland business

SSE sells 16.7% stake in Scotia Gas Networks for £621m

Gas ring

SSE has agreed to sell a minority stake in gas distribution business Scotia Gas Networks (SGN) to a Gulf state sovereign wealth fund for £621m.

The Perth-based group is selling 16.7% of SGN to subsidiaries of the Abu Dhabi Investment Authority.

The cash transaction is expected to be completed by the end of this month.

SSE will retain a 33.3% stake in SGN, which distributes gas to almost six million properties in Scotland and the south of England.

The sale follows a review announced by SSE in May.

In a statement, the energy firm said it would "set out its intentions" for the proceeds of the sale in its interim results statement on 9 November.

SSE acquired a 50% stake in SGN in 2005 for a total of £505m.

Chief executive Alistair Phillips-Davies said: "Over the last decade, SGN has become a leading gas distribution business for the benefit of customers and investors alike.

"The sale of a 16.7% 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."

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