Sun, 15 Dec 2019 | DIVISION SALE
Power utility SSE has announced it has completed the sale of its retail arm SSE Energy Services to OVO Energy for £500 million.
SSE will use the proceeds of £400 million cash plus a £100 million loan note to trim its debt. The loan note, to be issued by an OVO member, will be due in 2029 and has a 13.25 per cent annual interest rate.
All of Perth, Scotland-based SSE Energy Services’ 8,000 staff will transfer to OVO in the deal, which will also see OVO operate the SSE brand under license for a period to ensure a steady transition.
The deal, announced last September, follows SSE’s original plan to merge the business with Npower. That deal was abandoned in December 2018, despite regulatory approval, after the government introduced the energy price cap.
Following the deal’s completion, SSE is free to concentrate its business on renewable energy and electricity networks, while OVO further consolidates its position as a major presence in the energy industry.
Commenting on the sale, SSE Chief Executive Alistair Phillips-Davies said: “The sale is in line with our clear strategy, centred on developing, operating and owning renewable energy and electricity network assets, along with growing businesses complementary to this core.”
“SSE enters the new decade as a more focused group, even better positioned to lead the low carbon transformation required to achieve the UK's vital net zero commitment in the years to come.”
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