UK’s National Grid proposes $9b rights issue for investment

National Grid, a UK-based utility company, announced plans to raise £7 billion ($8.9 billion) through a fully underwritten rights issue of 1.09 billion new shares, aiming to invest £60 billion in energy network infrastructure, it said on Thursday, cited by Reuters.

This move aligns with Britain’s goal to decarbonise its power sector by 2035. The rights issue, priced at 645 pence per share, represents a discount of about 42 per cent to Wednesday’s closing price, with shares trading down 9 per cent at £10.26 by 0830 GMT.

Additionally, National Grid intends to sell its grain-liquefied natural gas (LNG) terminal and its US onshore renewables business to focus on networks.

Over the next five years, it plans to invest £23 billion in UK electricity transmission, £8 billion in UK electricity distribution, £17 billion in New York, and £11 billion in New England.

The company aims to create over 60,000 jobs with this investment. Despite reporting a 15 per cent decline in pretax profit for the year to March 31, National Grid forecasts annual asset growth of 10 per cent until its 2029 financial year.

Top shareholders include BlackRock, Capital Research Global, The Vanguard Group, Abu Dhabi Investment Authority, and Lazard Asset Management.