National Grid is poised to sell gas network to Beijing
The National Grid is poised to sell off its four remaining UK gas distribution networks to the Chinese government early in the new year.
Talks between the British distributor and the State Grid Corporation of China are in the final stages, according to sources with knowledge of the situation.
Selling the four gas networks that the National Grid owns is understood to be one of two options on the table, with an official announcement expected early in January.
Red alert: The National Grid could sell four of its remaining UK gas distribution networks to the Chinese government in the new year
In 2004, the National Grid sold four gas distribution networks, retaining four. If the sale went through, the Grid would still own the gas National Transmission System – the high-pressure network that links to the eight regional distributors.
The second option is for the National Grid to make the State Grid Corporation a major shareholder in it by issuing a fresh wave of stock.
Either deal would help to raise billions of pounds of capital, as well as marking the latest example of an Eastern entity investing heavily in British utilities.
The Chinese state-run grid is said to be keen to invest in UK infrastructure and operations, and the National Grid’s ability to sell its networks is an opening for the giant. The first option would see the Grid sell off each network to the Chinese.
A price-tag of between £1billion and £2billion per network is understood to be the most likely sum agreed, sources said.
When the four previous networks were sold in 2004, the total amount raised was £5.8billion.
The second option, which sources say is the more likely to be chosen, would make SCG a major investor in the National Grid.
The issue of 10 per cent of National Grid’s total shares, valued at around £2.2billion, would be given to the Chinese company in a private deal, making it the largest shareholder.
In 2004, three buyers snapped up the four available National Grid networks.
A consortium fronted by SSE purchased the South of England and Scotland networks for £3.2billion.
The Wales and the West network went to the Macquarie European Infrastructure Fund for £1.2billion.
The North of England network was bought by a consortium led by Li Ka Shing’s Cheung Kong Infrastructure Holdings for £1.4billion.
No one at the National Grid was available for comment.
Most watched Money videos
- The new Volkswagen Passat - a long range PHEV that's only available as an estate
- Blue Whale fund manager on the best of the Magnificent 7
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- MailOnline asks Lexie Limitless 5 quick fire EV road trip questions
- Land Rover unveil newest all-electric Range Rover SUV
- BMW's Vision Neue Klasse X unveils its sports activity vehicle future
- Mercedes has finally unveiled its new electric G-Class
- Mini celebrates the release of brand new all-electric car Mini Aceman
- Mini Cooper SE: The British icon gets an all-electric makeover
- BMW meets Swarovski and releases BMW i7 Crystal Headlights Iconic Glow
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- Currys shares surge after profit guidance upgrade as...
- HMRC phone customers spent 798 YEARS on hold in single...
- I don't want smart meters, so Eon is charging me £316 to...
- Hundreds of jobs at risk as Anglo slashes funding for...
- Royal Mail's future hanging in the balance as bid...
- Axe stamp duty on British shares, says Flutter boss as...
- Tesco boss pockets £10m in biggest ever pay deal at a UK...
- Virgin Money UK warns of pressure on profits ahead of...
- Investors ramp up bets against BT as new boss prepares to...
- Marston's losses narrow amid hopes of summer sporting...
- How refreshing that Anglo has chosen not to grab the...
- I believe pre-nups are so vital every couple should be...
- My neighbour has started keeping bees - can I stop him?...
- Why 16 to 24-year-olds are putting their parents to shame...
- MARKET REPORT: Vodafone shares rally as investors cheer...
- De Beers eyes £4bn London float as Anglo bids to fend off...
- The new 5.05% limited access account that savers are...
- Santander offers £175 to switch your current account -...