National Grid Plc plans to raise £6.8 billion ($8.7 billion) of capital to help fund a massive investment program as the shift to net zero requires a sweeping overhaul of Britain’s power network.
As well as issuing new shares, the company intends to sell its Grain liquefied natural gas terminal and its US onshore-wind business, according to a statement Thursday. The firm will use the proceeds to expand and strengthen the grid so that it can connect new renewables projects and vehicle-charging networks, and shoulder an expected doubling of electricity demand in the push to decarbonize.
The company will issue new shares at 645 pence apiece, the statement shows. The stock sank as much as 8.7% at the open, and traded at 1,030.5 pence as of 8:20 a.m. in London.
National Grid is a key player in the UK’s journey to net zero as grid infrastructure continues to hold back the pace of renewables expansion. It plans to spend £60 billion on networks in the UK and US over the next five years.
To underpin the company’s credit rating, about £750 million of the net proceeds will be used to refinance a portion of outstanding hybrid bonds that have first call dates in the next 15 months.
National Grid also reported annual earnings per share of 78 pence, above the 76-pence estimate of analysts surveyed by Bloomberg. The board recommended a dividend of 58.52 pence, which will be rebased given the increased number of shares following the rights issue. This payout is set to grow in line with UK inflation.
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