Iberdrola considers selling stake in Scottish Power

In an attempt to fund a $19bn infrastructure investment programme Iberdrola is considering whether to sell its minority stake in its subsidiary Scottish Power in the UK.

Scottish Power houses the company’s electricity distribution and high-voltage transmission, people familiar with the situation said.

The process is exploratory as it stands and no final decision has been made, these people said. Iberdrola declined to comment, reports the Financial Times.

The Spanish utility has been selling off non core assets since 2008 as it seeks to reduce a debt pile of $37.8bn as of June this year.

Ignacio Galan, Iberdrola’s executive chairman, has said he will concentrate on reducing net debt through a strategy of capital expenditure reduction, cost-cutting and asset sales, as well as through Iberdrola’s own cash flows.

As it is regulated, the company’s UK distribution and high-voltage transmission operations provide stable and predictable revenues that are likely to attract passive infrastructure funds if Iberdrola proceeds with a formal auction process.

Iberdrola has said it will invest £12bn in the UK in the next decade, with two-thirds going to its electricity networks business, and much of the rest to both offshore and onshore renewable energy projects.

Mr Galán this week met George Osborne, UK chancellor, to discuss the Spanish company’s investments in the British energy sector.

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