Iberdrola Agrees to Sell Scottish Power Generation to Drax Group for GBP702 Million -- Update

(adds Drax guidance on transaction impact, details on asset sold, expected date of close of transaction)

 
    By Cristina Roca

Iberdrola SA (IBE.MC) said Tuesday that it has agreed to sell its Scottish Power Generation Holdings Ltd business in the U.K. to Drax Group PLC (DRX.LN)'s Drax Smart Generation Holdco Ltd.

The energy company based in Bilbao, Spain, will sell 100% of Scottish Power's capital to Drax for GBP702 million ($922.3 million) in cash.

Iberdrola said it expects the sale to have a positive impact on its 2018 earnings, which will be quantified and announced when the transaction closes.

To finance the acquisition of Scottish Power, Drax has entered into "a fully-underwritten GBP725-million secured acquisition bridge facility agreement," the British electrical power company said in a statement.

Drax said it expects Scottish Power to Generate Ebitda of between GBP90 million and GBP110 million in 2019, and the acquisition will enable it to pay "a growing and sustainable dividend."

Scottish Power currently has a total capacity to generate 2,566 megawatts of electricity, Iberdrola said. Drax said Scottish Power's portfolio of pumped storage, hydro and gas-fired generation assets will significantly expand its low-carbon, renewable generation model.

The sale should be completed on Dec. 31, Drax said, conditional upon approval by Drax's shareholders and the UK Competition and Markets Authority.

Write to Cristina Roca at cristina.roca@dowjones.com; @_cristinaroca

(END) Dow Jones Newswires

October 16, 2018 03:00 ET (07:00 GMT)

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