(Reuters) - SSE Plc, Britain’s second biggest energy supplier, said it had agreed to sell a 16.7 percent stake in regional gas distribution business Scotia Gas Networks Ltd (SGN) to Abu Dhabi Investment Authority for 621 million pounds.
SSE, which expects the deal to close by the end of this month, said it expected to return the proceeds of the sale to shareholders and would provide an update on Nov. 9, along with its half-year results.
Like its biggest rival, Centrica, SSE has lost many customers in its retail business, mainly to smaller and often cheaper suppliers who now control 15.4 percent of the dual gas-electricity fuel market, up from just 1 percent four years ago.
The sale of its interest in SGN by SSE follows a similar move by National Grid, which is seeking to sell a majority stake in its own 8.5-billion-pound UK gas networks business.
SSE said on Monday it would retain a 33.3 percent stake in the business. The company had said in May it was considering selling up to a third of its 50 percent stake in SGN, which it had bought in 2005 for 505 million pounds.
SGN, which has 5.9 million connections, is co-owned by Canadian pension fund investors Ontario Teachers’ Pension Plan and Borealis.
Upon completion of the sale, SSE said it would continue to hold an interest in five economically-regulated energy networks with an estimated regulated asset value of over 7 billion pounds.
Reporting by Pranav Kiran and Rahul B in Bengaluru; Editing by Sunil Nair