National Grid to sell majority stake in distribution business

Britain’s National Grid Plc has put a majority stake in its 8.5 billion pound ($12.8 bln) gas distribution business up for sale as it shifts focus to betterperforming assets such as its US networks, it said on Tuesday.

The gas and electricity network operator also reported a 21 percent rise in first-half adjusted pretax profit to £1.37 billion, supported by a strong performance of its US business.

Shares in the company were up 1.7 percent in London at 1403 GMT, one of the biggest gainers on the FTSE 100 index.

“The UK gas distribution is a mature business that continues to require some investment but not enormous investment,” said Steve Holliday, National Grid’s long-serving chief executive who will leave the company next year.

The company said it expected the sale to complete in late 2016 and increase its annual asset growth rate from 5 percent to 7 percent. It did not specify the size of the stake.

The British gas distribution business is currently growing at a rate of about 2 percent, Holliday said.

“The sale of a majority stake in gas distribution assets will no doubt excite the market. Effectively National Grid is monetising these assets,” said analysts at Jefferies, who rate National Grid shares as a hold. (RTRS)