SSE Sells 25% Stake of SSEN Transmission to Ontario Teachers’ Pension Plan
Posted on 11/26/2022
The Ontario Teachers’ Pension Plan Board reached an agreement with Scotland-based energy provider, SSE plc. They will acquire a 25% minority stake within the electricity transmission network business, SSEN Transmission. Not only does this transaction rely on the economic date, March 31, 2022, but also holds a cash price tag of £1,465 million. These proceeds will secure the 25% stake and are expected in a timely fashion, in order to move forward with the completion of the exchange. The deal constitutes a class 2 transaction for the purposes of the U.K. Financial Conduct Authority’s Listing Rules, and as such, does not require SSE shareholders’ approval.
SSEN Transmission operates under the licensed entity, Scottish Hydro Electric Transmission plc. SSEN transports electricity generated from renewable resources – including onshore and offshore wind and hydro – from the north of Scotland across more than a quarter of the United Kingdom’s land mass. The investment by Ontario Teachers’ will help support the U.K. government’s net-zero 2050 targets, including the delivery of 50GW of offshore wind capacity. This is projected to be complete by 2030.
As at March 31, 2022, SSEN Transmission had a realized asset value of £4,155 million and net debt and debt-like items of £2,488 million, including £780 million of SSE shareholder loans. These shareholder loans for SSEN Transmission will remain in place and as they mature they are expected to be replaced with the attachment of an external debt. The sale of a minority stake will show SSE as the majority shareholder. Not only to retain control of operation management for the business, but also for the Ontario Teachers’ Pension Plan to be proportionately represented on SSEN Transmission’s Board of Directors. SSE’s Finance Director Gregor Alexander will be the Chairman of the new Board and Rob McDonald will maintain his role as Managing Director, alongside other key members of SSEN Transmission’s leadership team.
Morgan Stanley and Rothschild and Co. acted as SSE’s joint financial advisors and Freshfields Bruckhaus Deringer LLP acted as legal advisers to SSE on this transaction.
Ontario Teachers’ were advised by Evercore, as sole financial adviser, as well as Linklaters LLP as their legal adviser.
Ontario Teachers’ Infrastructure & Natural Resources Group, invests in electricity infrastructure worldwide. This group accelerates the energy transition through current investments. Presently with Caruna, Finland’s largest electricity distributor and Evoltz, an electricity transmission platform in Brazil. Alongside Spark Infrastructure, which invests in essential energy infrastructure in Australia to serve over 5 million homes and businesses.
Scottish Hydro plc was a public electricity supplier formed on August 1, 1989, after a change of name from North of Scotland Electricity plc on that date. It was listed on the London Stock Exchange and was once a constituent of the FTSE 100 Index but merged with Southern Electric in 1998. SSE stands for Scottish and Southern Energy.
Keywords: Ontario Teachers Pension Plan.