National Grid has put a majority stake in its £8.5 billion gas distribution business up for sale as it shifts focus to better-performing assets such as its US networks.
The gas and electricity network operator also reported a 21 per cent rise in first-half adjusted pre-tax profit to £1.37 billion, supported by a strong performance of its US business.
"The UK gas distribution is a mature business that continues to require some investment but not enormous investment," said Steve Holliday, National Grid's long-serving chief executive who will leave the company next year.
The company said it expected the sale to complete in late 2016 and increase its annual asset growth rate from five per cent to seven per cent. It did not specify the size of the stake.
The British gas distribution business is currently growing at a rate of about two per cent, Mr Holliday said.
"The sale of a majority stake in gas distribution assets will no doubt excite the market. Effectively National Grid is monetising these assets," said analysts at Jefferies, who rate National Grid shares as a hold.
Barclays analysts estimated the unit's enterprise value at between £10.6bn and £11.5bn, based on a 25 per cent to 35 per cent premium to its regulated asset value of £8.5bn.
National Grid also said it expected that tightening electricity margins meant it could issue around seven requests for emergency capacity this winter.
Last Wednesday it issued a request to Britain's energy industry to increase electricity supply backup for the first time since 2012 after breakdowns at some power plants and low wind energy output.
The company, which warned in July that this winter would see the tightest supply margin for power since 2009, added it expected to connect around 11 gigawatts of new generation between 2013 and 2021, less than half the new capacity it had forecast for that period in 2013.
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