SSE (LON: SSE), Equinor (NYSE: EQNR) sell stake in Dogger Bank wind project to ENI (BIT: ENI)

Summary

  • SSE Plc announced a 10 per cent stake sale in Dogger Bank Wind Farm project to Eni
  • The proceeds realised from the stake sale will be set aside for the utilisation for SSE’s low carbon growth plans
  • Equinor is set to operate the asset, while SSE Renewables will continue with the development and construction of Dogger Bank Wind Farm

 

SSE Plc (LON: SSE), the Perth-headquartered energy company, announced a 10 per cent stake sale in Dogger Bank Wind Farm project to the Rome-based oil and gas explorer Eni SpA (BIT: ENI) on Friday, 4 December. SSE is expected to receive a sum to the tune of £202.5 million for the equity consideration in Dogger Bank Wind Farm project from Eni. Additionally, Eni has agreed to buy a 10 per cent stake in Dogger Bank A & B from the Norway-headquartered oil-to-wind energy firm Equinor ASA (NYSE: EQNR). 

Deal details

With the necessary approvals from the regulators and lenders, the proposed transaction is likely to be completed by early-2021. Upon the finalisation of the deal, the proceeds realised from the stake sale will be set aside for the utilisation for SSE’s low carbon growth plans. Dogger Bank A and Dogger Bank B will have three major shareholders after the completion of transaction with a 40 per cent hold SSE and Equinor each and a 20 per cent control of Eni.

However, the third phase of project Dogger Bank C won’t see any change in the ownership with SSE and Equinor continuing to hold a 50 per cent each in the project. Earlier in November 2020, SSE and Equinor indicated a financial arrangement with regards to the first two phases of the Dogger Bank Wind Farm project.

All the three phases of the Dogger Bank Wind project are collectively slated to become the world’s largest offshore wind farm after the completion in March 2026. According to SSE, the three phases will be equipped to supply renewable-sourced electricity to nearly 5 per cent of the UK’s total demand with a target to generate power of around 18,000 GWh. As per the transaction arrangement, Equinor is set to operate the asset, while SSE Renewables, a subsidiary of SSE Plc, will continue with the development and construction of Dogger Bank Wind Farm.

Shares surge

A comprehensive rising streak was seen in the shares of SSE, Equinor and Eni on Friday, 4 December following the announcement of the development. The London Stock Exchange-listed shares of SSE were trading at GBX 1,389.50 (14:29 GMT), up 2.09 per cent after hitting an intraday high of GBX 1,408, in the early morning trades, up 3.45 per cent from the previous close of GBX 1,361 a piece. The stock of SSE pared partial gains as the trading progressed ahead but managed to sustain a jump of around 2 per cent.

SSE Plc (4 December)

(Source: Refinitiv, Thomson Reuters)

Shares of Eni, listed on Italy’s Borsa Italiana, rallied nearly 3 per cent in the trades on Friday extending the morning gains. The stock of Eni was trading at EUR 8.75, up 3.55 per cent from the previous market price of EUR 8.45 per share. Eni shares oscillated between a high and low of EUR 8.76 and EUR 8.53, respectively until 14:46 GMT.

Eni SpA (4 December)

(Source: Refinitiv, Thomson Reuters)

The New York Stock Exchange-floated shares of Equinor also went ahead in the wee hours of trading with the share price registering a gain of approximately 4 per cent. The stock of Equinor surged as much as 3.92 per cent to $16.71 from the previous closing price of $16.08 as on 3 December.

Equinor (4 December)

(Source: Refinitiv, Thomson Reuters)

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