Ørsted A/S signed an agreement to sell its Danish power distribution, residential customer and street lighting businesses in a deal worth 21.3 billion Danish kroner, just months after being forced to put the brakes on a sale because of political pressure.
Ørsted's board began assessing buyer interest for the three companies — including its power distribution business Radius and its street lighting segment City Light— in June 2018, but the divestment process was halted earlier this year when the Danish government, which holds a majority stake in Ørsted, withdrew its support for the deal.
Denmark-headquartered SEAS-NVE Holding A/S made an unsolicited offer for the companies in the second half of June 2019, and has now agreed to execute the deal on a cash and debt-free basis, according to a Sept. 18 release. SEAS-NVE, a consumer-owned energy company, is Denmark's second largest cooperatively-owned energy company. It provides energy and communication services in Denmark and internationally.
The deal is subject to certain regulatory approvals, including the go-ahead from the Danish Energy Agency. Upon closing in the first half of 2020, the employment of 750 workers across the three business lines will be transferred to SEAS-NVE.
"With Ørsted's global expansion in renewable energy, we're no longer the right owner of [these] businesses," Ørsted President and CEO Henrik Poulsen said. "We'll use the proceeds from the divestment to continue our global investments in green energy."
The sale to SEAS-NVE is expected to result in a gain on divestment of enterprises of 11 billion to 12 billion kroner, Ørsted said. The company added that the transaction will not change its outlook for the 2019 financial year.
Danske Bank and Citigroup acted as financial advisers to Ørsted.
As of Sept. 17, US$1 was equivalent to 6.75 Danish kroner.
