By Aby Jose Koilparambil and Yadarisa Shabong
(Reuters) -Britain’s National Grid plans to raise about 7 billion pounds ($8.9 billion) through a fully underwritten rights issue of 1.09 billion new shares as it gears up to invest 60 billion pounds in energy network infrastructure, it said on Thursday.
Britain has a target to decarbonise its power sector by 2035, which will require many more renewable power plants connected to the electricity grid.
Thursday’s announcement comes a day after UK Prime Minister Rishi Sunak called a national election on July 4.
“I don’t see a material impact if we see a change of government,” CEO John Pettigrew said in a media call, adding that the country has a stable, consistent policy and regulatory framework.
The rights issue is at 645 pence per share on the basis of seven new shares for every 24 existing shares, the company said, representing a discount of about 42% to Wednesday’s closing price. Shares in National Grid were trading 9% down at 10.26 pounds by 0830 GMT.
The London-based company also said it intends to sell its Grain liquefied natural gas (LNG) terminal and its U.S. onshore renewables business as the group shifts its focus to networks business.
National Grid said it will invest 60 billion pounds in the five years to the end of March 2029, nearly double its investment over the past five years, creating more than 60,000 jobs.
Of the overall investment planned, National Grid is allocating about 23 billion pounds for UK electricity transmission, 8 billion pounds for UK electricity distribution, 17 billion pounds in New York and 11 billion pounds in New England.
“National Grid has the traditional pros of a utility, but also major growth opportunities – a rarity for the sector,” Hargreaves Lansdown analyst Aarin Chiekrie wrote in a note.
The company, which runs Britain’s energy systems and operates electricity and gas businesses in New York and Massachusetts, also reported pretax profit from continuing operations of 3.05 billion pounds for the year to March 31, down 15% year on year.
The utility company forecast annual asset growth of 10% in the five-year period to the end of its 2029 financial year.
National Grid’s top shareholders include BlackRock, Capital Research Global, The Vanguard Group, sovereign wealth Abu Dhabi Investment Authority and Lazard Asset Management.
($1 = 0.7862 pounds)
(Reporting by Aby Jose Koilparambil and Yadarisa Shabong in BengaluruEditing by Sohini Goswami and David Goodman)
