IBERDROLA USA Inc., a wholly-owned subsidiary of IBERDROLA, today completed the sale of three gas distribution companies in Connecticut and Massachusetts to U.S. company UIL Holdings Corporation, in a transaction valued at approximately $1.25 billion(*) after price adjustments.
The equity value received is approximately $918 million, an increase after adjustments over the $885 million announced in May 2010.
The sale of the three subsidiaries - Connecticut Natural Gas (CNG), The Southern Connecticut Gas (SCG) and The Berkshire Gas Company (BGC) - was completed having obtained all the required regulatory approvals and having met the remaining conditions to which the transaction was subject.
The companies distribute approximately 56.5 billion cubic feet of natural gas per year to nearly 369,000 customers in the States of Connecticut and Massachusetts, and have a combined workforce of around 800 employees.
The sale forms part of IBERDROLA’s non-core asset divestment programme, whose goal is to maintain the financial strength of the Group, optimise its capital structure and deliver the rhythm of investment pledged to the markets.
The transaction follows others announced in 2010 by IBERDROLA, including the announced sales of the Seneca Lake gas storage facility in the US, 15.68% of the share capital of Dublin-based Petroceltic International plc, 2.7% of the share capital of Portuguese energy group EDP, and all its indirect shareholding interests in a number of Guatemalan companies.
The proceeds will be used to finance the major infrastructure project that IBERDROLA USA, through its Central Maine Power subsidiary, is building in Maine, known as the Maine Power Reliability Program (MPRP). This project, benefitting electricity distribution in Massachusetts, New Hampshire and Maine, and the interconnection between Maine and Canada, involves an investment of around $1.4 billion and will consist of around 500 miles of new and upgraded electricity transmission lines that will cross 75 towns and villages.
The project will support the development of new renewable energy resources and help ensure long-term reliability for customers by increasing the capacity and efficiency of New England transmission grid. The MPRP, which will be completed in 2015, will support an average of 2,000 jobs annually during the five-year construction phase, with a peak of over 3,000, and contribute significantly to the Maine economy. The project is the largest energy infrastructure project in the State’s history, and the first upgrade of its electricity grid in 40 years.
The Maine project is consistent with two of the Group’s main strategic objectives, those of a progressively more international business profile and of providing improved quality of service in its operating markets by upgrading and expanding transmission and distribution networks.
This announcement is not an offer for sale of securities in the United States, nor in any other jurisdiction. The securities referred to herein may not be sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933, as amended.
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