UU raises £85m in gas stake sale

UNITED Utilities has raised more than £87m by selling its 15% stake in gas distributor Northern Gas Networks.

The deal is the second realisation of an investment in as many weeks. Last Thursday it sold its stake in Manila Water of the Philippines for £44m.

Leeds-based Northern Gas is responsible for distributing gas to homes and businesses across the north of England, an area covering west, East & North Yorkshire, the North East and northern Cumbria.

NGN took on the contract in June 2005. The company serves 6.7 million people and has 2.5 million customers.

UU said it had sold its stake to the three other partners in NGN,  PG (April) Limited, a subsidiary of Cheung Kong Infrastructure Holdings; Beta Central Profits a subsidiary of Hongkong Electric Holdings and the SAS TrusteeCorporation, which is managed by German company RREEF for £85.75m.

UU, which runs the water and electricity networks in the North West, is retaining the contract to operate the gas network.

A spokeswoman for UU said: “This deal is about recycling capital. We did it last week with Manila Water and did something similar last year, We have realised the value of our investment and there was a good opportunity to do that with Northern Gas Networks.

“We have retained the contract which covers the operational side of the business as we did when we sold our stake in the electricity asset.”