Dong Energy A/S (CPH:DENERG) has agreed to offload its upstream oil and gas operations, completing its transformation into a "pure play renewables company," the Danish utility and offshore wind heavyweight said today.
Dong is selling Dong E&P A/S to London-headquartered INEOS for an unconditional payment of USD 1.05 billion (DKK 7 billion) on a cash and debt free basis. Of that, USD 250 million will be payable from 2018 to 2020. The deal also includes a contingent payment of USD 150 million linked to the Fredericia stabilisation plant and a contingent payment of up to USD 100 million subject to the development of the Rosebank field.
"Since the decision in 2016 to divest our upstream oil and gas business, we’ve actively worked to get the best transaction by selling the business as a whole, getting a good and fair price for it and ensuring the optimal conditions for the long-term development of the oil and gas business," Dong chief executive Henrik Poulsen said, adding that the transaction achieves that objective.
The deal is seen to close in the third quarter of 2017, subject to regulatory and certain other third party approvals. It is expected to result in a gain of about DKK 2.5 billion (USD 376m/EUR 336m), including the Fredericia contingent payment.
(DKK 1 = USD 0.150/EUR 0.134)
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