National Grid Launch fundraising rights Issue to raise the capital to build a new UK “Smart Grid”
24th May 2010
The National Grids Steve Holliday has launched a surprise £3.2bn rights issue drive to try and change the UK's power infrastructure.
The rights issue of new ordinary shares at a cost of £3.35 each is on the basis of two new ordinary shares for every five existing ordinary shares.
This is designed to raise the needed capital for building a new supply infrastructure to replace the current ageing and inadequate network. A new and improve “Smart Grid”.
National Grid chief executive, Steve Holliday, said: "Environmental targets, legislation, age related power station retirements and the decline of the UK's North Sea gas reserves are expected to result in a significant change in the generation mix between now and 2020.
"The board believes that raising £3.2bn through the rights issue will give it the scope and appropriate financial flexibility to deliver the group's strategy.
"The Board also believes that raising equity today will strengthen the Company's long-term competitive position to take advantage of an appropriate share of UK growth opportunities."
He added that the proceeds from the issue will be used to fund a portion of National Grid's UK capital investment programme and for general corporate purposes.