Grid to sell pounds 2.3bn Energis stake to fund overseas drive
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Your support makes all the difference.NATIONAL GRID, the owner of Britain's electricity transmission network, is to sell off its pounds 2.3bn stake in the telecoms operator Energis over the next three to five years to help fund a major overseas expansion drive.
David Jones, the Grid's chief executive, said yesterday that it intended to sell the 74 per cent Energis stake at a premium. It aims to generate more than 20 per cent of group profits outside its core UK transmission business by building up other investments.
The Grid is looking to spend at least pounds 1bn acquiring an electricity transmission and distribution business in the United States. It also intends to bid for the UK's air-traffic control service.
The Grid plans to roll out a series of Energis-style operations - long- distance networks targeted at business customers - in other parts of the world such as India and Poland.
The phenomenal success of Energis, whose network is attached to the Grid's high-voltage transmission lines, has already earned the Grid a huge windfall.
The Energis flotation last December raised net proceeds of pounds 203m for the Grid. Since then, Energis has increased in value by nearly four times, making the Grid's remaining stake in the business equal to one-third of its entire market capitalisation. The Energis stake is valued in the Grid's accounts at pounds 250m but its current market valuation is almost 10 times that.
Mr Jones said he was hopeful that the Grid would have tied up a US acquisition by March next year, adding that it was in "serious discussions" with a number of companies.
The Grid is also looking to expand its operations in Brazil through an agreement signed in July with the country's national transmission company, Electrobras, to build privately-owned networks.
The Government has issued a consultation paper on the privatisation of air traffic control. The Grid is due to respond along with other prospective bidders in January but the sell-off is likely to take 18 months to complete.
Pre-tax profits for the six months to the end of September were down by 2 per cent to pounds 221m due to a doubling of interest charges to pounds 63m and a reduction in revenues because of price caps.
Operating costs fell by 4 per cent compared with 14 per cent last year. Mr Jones said the Grid was on course to achieve cost reductions of 6 per cent a year.
Outlook, page 21
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