UK oil giant Centrica to sell North American energy business for $3.63 billion

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UK oil giant Centrica to sell North American energy business for $3.63 billion

Centrica Plc., the Windsor, Berkshire-based British multinational energy and services company primarily focused on electricity and gas distribution business, said later last week that the British company was going to sell off its North American energy subsidiary Direct Energy to the Houston-based nuclear electric power generation company NRG energy company at a $3.63 billion deal, paving the way for the new Chief of the British company to engage more on to its home market.

Apart from that, Centrica Plc. had announced the sell-off deal alongside its half-year earnings’ which had reported a perilous profit slump due to the pandemic’s fiscal fallouts alongside a multi-year low commodity futures price.

Nonetheless, despite a downcast h1, 2020 earnings’ report, shares’ prices of the British energy major had wrapped up Friday’s market 16.7 per cent after surging as much as 40 per cent at the early trading, while the Houston-based NRG Energy gained 2.9 per cent as both sides of the stakeholders had welcomed the deal.

Centrica seeks to use the $3.63 billion to reduce its net debt

Meanwhile, adding that the Berkshire-based British energy company, which has a net debt of 3.868 billion to date, would capitalize on the cash raised from the sale of its North American subsidy to reduce its net debts and to shore up its ailing pension schemes, Centrica Group Chief Executive Chris O’Shea said to the reporters in a post-earnings’ conference call later last week, “We had a number of expressions of interest in Direct Energy but it came down to the right price and the right buyer”.

However, the transaction was brough into light at a perilous period for the power providers on both sides of the Atlantic, as a number of energy companies in both US and UK had been struggling to reshape their businesses aimed at equipping them to grapple with the global pandemic outbreak’s financial repercussions.