UK -- Western Power Distribution (WPD), a UK utility business formerly owned by the Pennsylvania-based PPL Corporation, was sold to National Grid last week for $10.7 billion.
PPL withdrew from the UK to focus on operations in the US. The company expects the sale to net $10.4 billion in net proceeds, reports Daily Energy Insider.
"Today's sale recognizes the economic value that PPL created by advancing WPD into the premier collection of electricity distribution networks in the UK, a company that year after year delivered operational excellence, superior customer satisfaction, and innovative solutions to advance a cleaner energy future," said PPL President and CEO Vincent Sorgi.
It is the first of two transactions meant to advance PPL's efforts in the United States. The other, originally announced in March, will include a planned acquisition of The Narragansett Electric Company -- Rhode Island's primary electric and gas utility. That utility is currently owned by National Grid, but PPL intends to buy it up for approximately $3.8 billion by March 2022. Both companies have already submitted regulatory filings necessary for approval of the acquisition, reports Daily Energy Insider.
"Together, the sale of WPD and the acquisition of Narragansett Electric will better position PPL for long-term growth and success by simplifying our business mix, strengthening our credit metrics, improving our prospects for long-term earnings growth, and providing us greater financial flexibility to invest in sustainable energy solutions," Sorgi said.
With the second transaction finished, PPL should be left with about $6.6 billion in net cash proceeds to spend on other growth opportunities. Part of this will be used to slash the company's outstanding debt by about $500 million, to around $3 billion remaining.
