September 13 (Renewables Now) - UK utility SSE plc (LON:SSE) announced today it has struck a GBP-500-million (USD 623m/EUR 562m) deal to sell its energy services business to Ovo Group Ltd.
Under the terms of the deal, SSE will get GBP 400 million in cash and GBP 100 million in loan notes. About GBP 59 million will be deducted from the cash portion to reflect accruals in respect of the Capacity Market mechanism along with other debt-like items.
The transaction, which is expected to close in late 2019 or early 2020, will see all of SSE Energy Services’ roughly 8,000 employees transfer to OVO Energy Ltd.
SSE noted that this deal aligns with the company’s view that the best future for the SSE Energy Services business lies outside of the SSE group.
“Following the transaction, SSE will be able to give an even greater focus to delivering the low carbon infrastructure needed to help the UK reach net zero emissions,” said Alistair Phillips-Davies, CEO of SSE, adding that the company focuses on its core business of developing, operating and owning renewable energy and electricity network assets.
SSE Energy Services is a supplier of energy and related services to household customers across Great Britain. The business has been held for disposal and has been accounted for as a discontinued operation as of March 31, 2019.
SSE Energy Services was supposed to merge with Innogy’s (ETR:IGY) own retail business in Britain but the transaction was abandoned in December because the two parent companies could not reach an agreement on revised commercial terms.
(GBP 1.0 = USD 1.245/EUR 1.123)