Press
Joint Statement from ESB and Viridian
Press release
Joint Statement from ESB and Viridian
Conditional agreement reached for ESB to acquire NIE, the Northern Ireland electricity networks business, from Viridian Group (Viridian)
ESB has entered into an agreement with the Arcapita Bank-owned Viridian Group for the acquisition, by a wholly-owned subsidiary of ESB, of Northern Ireland Electricity plc (NIE), the Northern Ireland transmission and distribution business of the Viridian Group.
As part of the acquisition, ESB will also acquire certain associated companies of NIE, including NIE Powerteam Limited and Powerteam Electrical Services (UK) Limited, which provide electrical construction and maintenance services (together with NIE, the NIE Group). In total, the NIE Group employs approximately 1,300 staff.
Under the terms of the share purchase agreement, ESB will pay £1,034 million (€1,248 million) for the NIE Group subject to certain completion adjustments. ESB will also assume obligations of the NIE Group, including those under a £175 million (€211 million) Eurobond. NIE’s Regulated Asset Base at 31 March 2010 was £1,007 million (€1,215 million).
Completion of the transaction is subject to a number of conditions, including conditions relating to Irish and UK competition clearances and notifications and a refinancing of the existing indebtedness of the Viridian Group. Subject to fulfilment of the conditions, the transaction is expected to complete by the end of 2010.
Arcapita will continue to own the Viridian Group, which it acquired in 2006. Its principal businesses following completion of the transaction will be Viridian Power & Energy, the Power Procurement business and NIE Energy Supply. These businesses employ approximately 340 people.
ESB Chief Executive, Padraig McManus, said: "This acquisition demonstrates ESB’s continued ambition to grow our business in the rapidly changing energy sector on this island. NIE is a well-run, efficient business and will continue to operate on that basis. ESB is fully committed to delivering the significant investment in Northern Ireland’s transmission and distribution networks that will be required to deliver our common energy sustainability policy objectives over the coming years and we believe that customers in Northern Ireland will benefit from this transaction in the longer term."
Viridian Group Chairman, Patrick Haren, said: "This transaction represents an important milestone in the development of the Viridian Group. It allows the Group’s regulated network activities to further their growth under new ownership. The employees of the NIE Group can feel proud of recent achievements and we wish them well for the future. Under Arcapita’s ownership, the remaining Group will be focused on its very significant generation and supply activities."
Additional information
NIE owns the regulated electricity transmission and distribution network in Northern Ireland and is responsible for the planning, development, construction and maintenance of the entire network, as well as the operation of the distribution network. ESB, through its ESB Networks division, owns the electricity transmission and distribution network in the Republic of Ireland (RoI).
ESB Networks and NIE have a long track record of co-operation and recently worked closely together to ensure restoration of the electricity network in Northern Ireland following damage from a severe storm. The transaction will enhance this strong working relationship to the benefit of customers and all stakeholders.
ESB Networks and NIE will play a critical role in assisting the Government in each jurisdiction to achieve energy and environmental targets and policy objectives, including building the infrastructure and connections required for the development of more renewable generation, rolling out smart metering and enhancing security of supply through strengthened interconnection.
Following completion of the transaction, NIE will continue to operate as a stand-alone business under the NIE brand and identity. NIE will also continue to comply with its current licence obligations, including in respect of the independence of a majority of its board of directors and the maintenance of an investment grade credit rating.
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Background
NIE is regulated and its revenue is derived principally through charges for transmission services and for use of the distribution system. The transmission and distribution network in Northern Ireland comprises approximately 2,100km of the high voltage transmission system and approximately 42,900km of the low voltage distribution system. NIE Powerteam Limited provides construction and maintenance services exclusively to the transmission and distribution network. Powerteam Electrical Services provides similar services to third party electricity distribution businesses and to other industrial customers.
Founded in 1927, ESB is one of Ireland’s leading companies with an annual revenue of more than €3.5 billion and approximately 6,800 employees. A vertically integrated utility with generation, networks and supply businesses, as well as a highly successful international business, ESB’s annual capital investment is in the region of €1.1 billion. Over the past decade, ESB has undertaken a €6 billion investment programme to successfully refurbish the Republic of Ireland’s electricity infrastructure. It has now embarked on the implementation of a €22 billion investment strategy, which will make the company carbon-neutral by 2035; half of this spend is directed at developing renewable energy generation and smart networks. Further details on ESB can be found at www.esb.ie
Viridian Power & Energy is an integrated generation and supply business comprising modern gas-fired generation at Huntstown in the RoI, Energia, a leading supplier of electricity and gas to business customers across the island of Ireland and a growing windfarm portfolio. NIE Energy Supply is a regulated supplier to c.800,000 residential and business customers in Northern Ireland. Power Procurement, also a regulated business, administers c.1,500MW of generation capacity under contract in Northern Ireland.
Headquartered in Bahrain with offices in Atlanta, London and Singapore, Arcapita’s four principal lines of business are corporate investment, real estate investment, asset-based investment and venture capital. To date, the Bank has completed 71 transactions with a total value of more than $28.4 billion and has an equity capital base of $1.3 billion, and $7.9 billion in funds under management. Arcapita’s mission is to provide innovative and distinctive investment opportunities that generate superior risk-adjusted returns while adhering to Islamic principles. Further details on Arcapita can be found at www.arcapita.com.
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