SSE PLC (LON:SSE) is raising up to £380mln in cash from the sale of a 50% share in its SSE Enterprise Telecoms business (SSEET) to Infracapital.
The FTSE 100-listed utility, which at the start of this week abandoned a proposed merger of its energy services business with German-owned Npower due to competition issues, said the proceeds of the transaction will be used to reduce its net debt.
READ: SSE calls off Npower merger amid worries about price cap and competition
The group said the disposal consideration comprises an initial £215mln to be paid on completion of the transaction, which is expected to be by the end of June 2019 at the latest.
It added that up to £85mln will be a deferred consideration based on SSEET achieving certain business objectives, and another sum of up to £80mln will be paid in a series of instalments in the five-year period to 2024, based on financial targets for out-performance.
The group noted that SSEET is an infrastructure provider that delivers leading-edge connectivity services to businesses through its private UK-wide telecoms network.
It said the transaction “aligns with the SSE group's strategy to create value for shareholders and society by giving each of its businesses, such as SSEET, the best platform from which to realise its full potential and maximise its future success.”
Neil Kirkby, SSEET’s managing director, said: "Infracapital has a proven record of actively supporting the companies they work with; this partnership heralds an exciting era of growth for our dynamic telecoms business.“