June 26, 2018 / 7:04 AM / 6 months ago

UPDATE 1-Orsted plans to sell Danish power business

(Adds details, analyst comment)

COPENHAGEN, June 26 (Reuters) - Denmark’s Orsted , the world’s largest offshore wind developer, is looking to sell its Danish power distribution and residential customer businesses to focus on developing its international renewable energy operations.

The company, which sold its oil and gas business to Ineos last year, has appointed Danske Bank as an adviser and expects to make a decision on a potential divestment before the end of June next year, it said in a statement.

The businesses are well-run but do not support the strategy of long-term international growth within renewable energy, and so the board has decided to begin a process to assess market interest in them, Orsted said.

Most likely buyers are other Danish power distributors, and the price could be 8 to 13 billion Danish crowns ($1.3-2.0 billion), given an operating profit of 1.3 billion crowns last year, Sydbank analyst Morten Imsgard said.

Orsted also said it would set up a new business unit, Customer Solutions, headed by Executive Vice President Morten Buchgreitz.

The activities considered for divestment will be organised in a separate business unit, which will also be headed by Buchgreitz, it said.

The cash flow from a potential divestment will be included in the company’s overall capital planning where the priorities are to maintain its credit rating and dividend policy and complete “value-creating investments in renewables”.

Orsted kept its 2018 financial guidance.

$1 = 6.3665 Danish crowns Reporting by Teis Jensen; Editing by Louise Heavens and Mark Potter

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