SSE could pay special dividend after selling gas stake to Abu Dhabi

Scottish energy company SSE has agreed to sell a stake in Scotia Gas Networks to subsidiaries of the Abu Dhabi Investment Authority for £621m.

The FTSE 100 company will sell 16.7% of its stake and retain 33.3% equity in SGN by the end of the October, with the proceeds used to return value for shareholders or invested, which will be announced on 9 November.

After the sale SSE will have an interest in five economically-regulated energy networks with regulated asset value of over £7bn, which is expected to increase to £8.5bn by March 2018 with continued investment.

SSE chief executive Alistair Phillips-Davies, said: "Over the last decade, SGN has become a leading gas distribution business for the benefit of customers and investors alike.

“The sale of a 16.7% stake confirms SSE's ability to deliver value for shareholders through focused, timely disposals while at the same time retaining a diverse range of regulated and unregulated businesses in order to support long term dividend growth."

In 2005, SSE bought a 50% stake for £505m in SGN, which distributes gas to almost 6m properties in Scotland and southern England and paid dividends and other distributions worth £750m to SSE.