Centrica said it would use the proceeds to reduce net debt, which rose by 18% to £2.8bn during the first half of the year, and to make a “material” contribution to its defined benefit pension schemes, where a £1bn increase was made in the technical pension deficit.
If the deal is approved by shareholders and regulators it is expected to complete before the end of this year and, alongside the 5,000 job cuts announced last month, the board said this would create “a simpler and leaner energy services and solutions company”.
Meanwhile, the former blue-chip group - demoted last month - reported half-year results showing revenue down 9% to £12.5bn, driven largely by lower demand for energy from businesses due to the coronavirus (COVID-19) pandemic
A statutory loss for the period of £278mln after taking a £1.04bn net exceptional charge, including restructuring costs of £251mln, and £785mln of impairments oil, gas and nuclear assets due to the fall in commodity price and nuclear plant availability issues. Underlying profits (EBITDA) fell by 19% to £869mln.
In the results statement, Centrica chief executive Chris O’Shea felt it was a resilient performance against the backdrop of the COVID-19 crisis.
"Our mission now is to turn around the company by putting customers at the heart of everything we do and creating a simpler, leaner, more modern and more sustainable company.”
Shares were up 22% to 49.34p early on Friday, though still down 45% since the start of the year.
Analysts at UBS said that while the announcements were likely to get a positive reaction from the market with equity value at low levels, "but challenges remain, and the upside from the US disposal may be absorbed into the pension deficit".
However, the US business was sold for well above UBS's valuation of US$2.85bn.
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