Proposed Sale of Direct Energy for $3.625B to NRG Energy

Source: 7/24/2020, Location: North America

Centrica plc (“Centrica”) announces that it has entered into an agreement to sell its North American energy supply, services and trading business, Direct Energy, to NRG Energy, Inc. (“NRG Energy”) for $3.625 billion in cash (equivalent to approximately £2.85 billion) on a debt free, cash free basis (the “Transaction”).

Transaction headlines

- Attractive valuation for Direct Energy, representing an EV to 2019 Underlying Adjusted EBITDA multiple of 7.9x
- Increases the long term strength of the Group’s balance sheet with Net Cash Proceeds intended to be used to reduce net debt significantly and to make a material contribution to the Group’s defined benefit pension schemes
- Alongside the significant restructure announced in June 2020, creates a simpler and leaner energy services and solutions company, focused on delivering for its customers and enabling the transition to a lower carbon future
- Centrica to focus on its core home markets of the U.K. and Ireland, where it has leading market positions
- More predictable and stable cash flows from the remaining Group
- The Transaction is conditional upon agreement by Centrica’s shareholders and various other approvals, including regulatory approvals, and is expected to complete in the fourth quarter of 2020
- Centrica’s Board considers the Transaction to be in the best interests of Centrica and its shareholders

Chris O’Shea, Group Chief Executive of Centrica, said:

“The transaction provides Centrica with an opportunity to realise significant value for our shareholders at an attractive valuation. This disposal is aligned to our strategy to become a simpler, leaner business and in addition it will materially strengthen our balance sheet and remove a source of earnings volatility from the Group. Combined with our focus on completing our intended exits from Spirit Energy and Nuclear at the appropriate time, this is expected to lead to a more predictable and high-quality earnings stream moving forward.

Direct Energy is a strong business with a great team. I believe NRG will be an owner who will invest in the business and make it even better. The remaining Company will be an energy services and solutions company, helping customers to transition to a lower carbon future, focused on the U.K. and Ireland where we have leading market positions. Alongside our recently announced organisational restructure, which puts the customer at the heart of everything we do and accelerates the delivery of targeted cost savings, this transaction is a fundamental step in the turnaround of Centrica and will leave us well placed to deliver for both customers and shareholders.”

Centrica will host a conference call at 9am U.K. time on 24 July 2020 to discuss the Transaction and its Interim results, which were also released.

The Transaction constitutes a Class 1 transaction for Centrica under the Listing Rules and completion of the Transaction is therefore conditional on, inter alia, the approval of Centrica’s shareholders at a general meeting of the Company's shareholders. A circular containing details of the Transaction and a notice convening a general meeting of the Company will be sent to Centrica’s shareholders as soon as practicable, with the general meeting expected to be held in mid-August. This summary should be read in conjunction with the full text of this announcement.

Chad >>  3/24/2023 - Savannah Energy PLC, the British independent energy company focused around the delivery of Projects that Matter, notes the Decree issued by the Presi...
United States >>  3/23/2023 - Spruce Power Holding Corporation (NYSE: SPRU) (“Spruce” or the “Company”), a leading owner and operator of distributed solar energy assets across the ...

Thailand >>  3/22/2023 - Valeura Energy Inc. (TSX:VLE) (“Valeura” or the “Company”), the upstream oil and gas company with assets in the offshore Gulf of Thailand and the Thra...
United States >>  3/22/2023 - BluEarth Renewables US LLC ("BluEarth") is pleased to announce it has acquired seven wind and solar development projects in the United States, totalin...

United States >>  3/22/2023 - CorEnergy Infrastructure Trust, Inc. (NYSE: CORR, CORRPrA) ("CorEnergy" or the "Company") announced today that it has retained an advisor for the sale...
United States >>  3/21/2023 - Spearmint Energy (“Spearmint” or the “Company”), a next-generation renewable energy company enabling the clean energy revolution through battery energ...

Gulf Oil and Gas
Copyright © 2023 ICT All rights reserved. - Terms of Service - Privacy Policy.