National Grid to raise $9 bln in biggest UK rights issue since 2009
National Grid's 7 billion pounds rights issue for energy networks aligns with UK's decarbonisation goal. CEO John Pettigrew assures stable regulatory framework. Shares drop over 10% amid political risk concerns in the sector.
plans to raise about 7 billion pounds ($8.9 billion) in the largest since 2009 as it gears up to invest 60 billion pounds in , it said on Thursday.Britain has a target to decarbonise its power sector by 2035, which will require many more connected to the .
Thursday's announcement comes a day after UK Prime Minister called a national election on July 4.
"I don't see a material impact if we see a change of government," CEO John Pettigrew said in a media call, adding that the country has a stable .
Shares in were down more than 10% at 10.09 pounds by 1040 GMT. Other British utilities were also down sharply on concern over political risk in the sector.
The planned rights issue is National Grid's largest ever and its first since 2010, a company spokesperson said.
It is also the largest in the UK since 2009 and Europe's biggest since 2021, data shows.
The company, which runs Britain's energy systems and operates electricity and gas businesses in New York and Massachusetts, allocated about 31 billion pounds for UK electricity transmission and distribution, with the rest earmarked for the United States.
DISCOUNTED SHARES
The rights issue of 1.09 billion new shares is at 645 pence per share on the basis of seven new shares for every 24 existing shares, the company said, representing a 34.7% discount, adjusted to reflect a recommended 2024 final dividend of 39.12 pence a share.
The London-based company said it intends to sell its Grain liquefied natural gas terminal and its U.S. onshore renewables business to shift focus to its networks business.
National Grid said it will invest the 60 billion pounds in the five years to the end of March 2029, nearly double its over the past five years, creating more than 60,000 jobs.
"National Grid has the traditional pros of a utility, but also major growth opportunities - a rarity for the sector," analyst Aarin Chiekrie wrote in a note.
The company also reported a 15% fall in pretax profit from continuing operations to 3.05 billion pounds for the year to March 31.
The forecast annual asset growth of 10% in the five-year period to the end of its 2029 financial year.
National Grid's top shareholders include , , , sovereign wealth Abu Dhabi Investment Authority and Lazard Asset Management.
Source: Stocks-Markets-Economic Times
