FOR
IMMEDIATE RELEASE
23
May 2024
National Grid
plc
7 for 24 fully underwritten
Rights Issue to raise c.£7 billion
New 5-year investment
framework for FY25-29
Deliver £60bn investment in
energy infrastructure
To fund a significant step up in
capital investment to around £60 billion in energy network
infrastructure, the Board of National Grid plc ("National Grid" or the "Company") today announces a capital
raise of approximately £7 billion by way of a fully underwritten
Rights Issue of 1,085,448,980 New Shares at 645 pence per New Share
on the basis of 7 New Shares for every 24 Existing Shares (the
"Rights Issue").
National Grid's results for the year
ended 31 March 2024 have been released today in an accompanying
announcement.
SUMMARY OF BACKGROUND TO AND REASONS FOR THE RIGHTS
ISSUE
National Grid plays a critical role
in delivering the energy transition across our jurisdictions, by
building and maintaining the transmission and distribution
infrastructure to enable the connection of cleaner, more affordable
renewable energy. Not only will this enable the decarbonisation of
the economies we serve, it will also ensure we can meet the demand
growth we anticipate from a more technology-enabled economy, as
well as greater electrification of homes, heating and
vehicles.
The opportunities presented by the
growth of electricity demand, and the consensus among our
regulators and jurisdictions of the urgent need for decarbonisation
are unprecedented. It's against this backdrop that we expect to
significantly increase our capital investment over the next five
years.
Our geographic position and our work
with governments and regulators provides us with an unprecedented
growth opportunity that we expect will create substantial value for
our shareholders. This investment in new infrastructure will
enhance resiliency and enable the jurisdictions in which we operate
to make meaningful progress in their journeys towards a
decarbonised energy system. The step-up in investment as set out in
our new 5-year financial framework underscores National Grid's
position as one of the FTSE's biggest investors in the delivery of
the energy transition. Over the last three years we have reshaped
our portfolio and now have a mix of businesses that is increasingly
weighted towards electricity transmission and distribution, making
us well-placed to capture the significant network growth
opportunities that lie ahead. With our operational and regulatory
capabilities, combined with a strong track record of delivery, we
are confident that we can deliver this step-up in new
infrastructure that will provide greater levels of energy security
and enable diversification of energy sources to help decarbonise
the economies we serve.
The Board unanimously believes that
raising net proceeds of approximately £6.8 billion through the
Rights Issue will give the Group appropriate financial flexibility
to deliver the Group's strategy over the 5-year financial
framework, and funding clarity until at least the end of the
RIIO-T3 period.
The Rights Issue net proceeds of
approximately £6.8 billion will principally be utilised to fund a
higher-growth investment phase for the Group, with around £60
billion of capital investment expected during the 5-year period
from FY25 to FY29. In the near term, to support efficient
management of funding costs, approximately £750 million of the net
proceeds will be used to refinance a portion of the Group's
outstanding hybrid bonds that have first call dates in the next 15
months.
INDICATIVE SUMMARY TIMETABLE OF PRINCIPAL
EVENTS
Announcement of Rights
Issue........................................................................
|
|
23 May
2024
|
Admission and commencement of dealings in New Shares, nil
paid, on the London Stock Exchange...............................................................................
|
|
8.00 a.m. on 24 May
2024
|
It is expected that the dealings in
the New Shares on the London Stock exchange will commence at 8.00
a.m. (London time) on 12 June 2024.
FOR
FURTHER INFORMATION, PLEASE CONTACT:
National Grid:
Investors
Nick Ashworth
|
+44 (0)
7814 355 590
|
Angela Broad
|
+44 (0)
7825 351 918
|
James Flanagan
|
+44 (0)
7970 778 952
|
Media
Molly Neal
|
+44 (0)
7583 102 727
|
Danielle Dominey-Kent
|
+44 (0)
7977 054 575
|
Lyndsey Evans
|
+44 (0)
7714 672 052
|
Brunswick
|
+44 (0) 20 7404
5959
|
Susan Gilchrist
|
Dan Roberts
|
|
Peter Hesse
|
|
IMPORTANT NOTICES
This announcement has been issued by
and is the sole responsibility of the Company. The information
contained in this announcement is for background purposes only and
does not purport to be full or complete. No reliance may or should
be placed by any person for any purpose whatsoever on the
information contained in this announcement or on its accuracy or
completeness. The information in this announcement is subject to
change without notice.
This announcement is not a
prospectus but an advertisement. Neither this announcement nor
anything contained in it shall form the basis of, or be relied upon
in conjunction with, any offer or commitment whatsoever in any
jurisdiction.
This announcement does not contain
or constitute an offer for sale or the solicitation of an offer to
purchase securities in the United States. The Nil Paid Rights, the
Fully Paid Rights and the New Shares have not been and will not be
registered under the US Securities Act of 1933, as amended (the
"Securities Act") or under
any securities laws of any state or other jurisdiction of the
United States and may not be offered, sold, pledged, taken up,
exercised, resold, renounced, transferred or delivered, directly or
indirectly, in or into the United States except pursuant to an
applicable exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and in compliance
with any applicable securities laws of any state or other
jurisdiction of the United States or other jurisdiction. There will
be no public offer of the Nil Paid Rights, the Fully Paid Rights,
the Provisional Allotment Letters or the New Shares in the United
States. Subject to certain limited exceptions, Provisional
Allotment Letters have not been, and will not be, sent to, and Nil
Paid Rights have not been, and will not be, credited to the CREST
account of, any Qualifying Shareholder with a registered address in
or that is known to be located in the United States. None of the
New Shares, the Nil Paid Rights, the Fully Paid Rights or the
Provisional Allotment Letters, this announcement or any other
document connected with the Rights Issue has been or will be
approved or disapproved by the United States Securities and
Exchange Commission or by the securities commissions of any state
or other jurisdiction of the United States or any other regulatory
authority, nor have any of the foregoing authorities passed upon or
endorsed the merits of the offering of the New Shares, the Nil Paid
Rights, the Fully Paid Rights or the accuracy or adequacy of the
Provisional Allotment Letters, this announcement or any other
document connected with the Rights Issue. Any representation to the
contrary is a criminal offence in the United States.
The distribution of this
announcement, the Prospectus, the Provisional Allotment Letter and
the offering or transfer of Nil Paid Rights, Fully Paid Rights or
New Shares into jurisdictions other than the United Kingdom may be
restricted by law, and therefore persons into whose possession this
announcement comes should inform themselves about and observe any
such restrictions.
This announcement does not
constitute a recommendation concerning any investor's options with
respect to the Rights Issue. The price and value of securities can
go down as well as up. Past performance is not a guide to future
performance. The contents of this announcement are not to be
construed as legal, business, financial or tax advice. Each
shareholder or prospective investor should consult his, her or its
own legal adviser, business adviser, financial adviser or tax
adviser for legal, financial, business or tax advice. Acquiring
investments to which this announcement relates may expose an
investor to a significant risk of losing all of the amount
invested.
FORWARD-LOOKING STATEMENTS
This announcement contains certain
statements that are neither reported financial results nor other
historical information. These statements are forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. These statements include information with
respect to National Grid's (the Company) financial condition, its
results of operations and businesses, strategy, plans and
objectives. Words such as 'aims', 'anticipates', 'expects',
'should', 'intends', 'plans', 'believes', 'outlook', 'seeks',
'estimates', 'targets', 'may', 'will', 'continue', 'project' and
similar expressions, as well as statements in the future tense,
identify forward-looking statements. This document also references
climate-related targets and climate-related risks which differ from
conventional financial risks in that they are complex, novel and
tend to involve projection over long term scenarios which are
subject to significant uncertainty and change. These
forward-looking statements are not guarantees of National Grid's
future performance and are subject to assumptions, risks and
uncertainties that could cause actual future results to differ
materially from those expressed in or implied by such
forward-looking statements or targets. Many of these assumptions,
risks and uncertainties relate to factors that are beyond National
Grid's ability to control, predict or estimate precisely, such as
changes in laws or regulations and decisions by governmental bodies
or regulators, including those relating to current and upcoming
price controls in the UK and rate cases in the US, as well as the
future of system operation in the UK; the timing of construction
and delivery by third parties of new generation projects requiring
connection; breaches of, or changes in, environmental, climate
change and health and safety laws or regulations, including
breaches or other incidents arising from the potentially harmful
nature of its activities; network failure or interruption, the
inability to carry out critical non-network operations and damage
to infrastructure, due to adverse weather conditions including the
impact of major storms as well as the results of climate change,
due to counterparties being unable to deliver physical commodities;
reliability of and access to IT systems, including or due to the
failure of or unauthorised access to or deliberate breaches of
National Grid's systems and supporting technology; failure to
adequately forecast and respond to disruptions in energy supply;
performance against regulatory targets and standards and against
National Grid's peers with the aim of delivering stakeholder
expectations regarding costs and efficiency savings, as well as
against targets and standards designed to support its role in the
energy transition; and customers and counterparties (including
financial institutions) failing to perform their obligations to the
Company. Other factors that could cause actual results to differ
materially from those described in this announcement include
fluctuations in exchange rates, interest rates and commodity price
indices; restrictions and conditions (including filing
requirements) in National Grid's borrowing and debt arrangements,
funding costs and access to financing; regulatory requirements for
the Company to maintain financial resources in certain parts of its
business and restrictions on some subsidiaries' transactions such
as paying dividends, lending or levying charges; the delayed timing
of recoveries and payments in National Grid's regulated businesses,
and whether aspects of its activities are contestable; the funding
requirements and performance of National Grid's pension schemes and
other post-retirement benefit schemes; the failure to attract,
develop and retain employees with the necessary competencies,
including leadership and business capabilities, and any significant
disputes arising with National Grid's employees or breaches of laws
or regulations by its employees; the failure to respond to market
developments, including competition for onshore transmission; the
threats and opportunities presented by emerging technology; the
failure by the Company to respond to, or meet its own commitments
as a leader in relation to, climate change development activities
relating to energy transition, including the integration of
distributed energy resources; and the need to grow the Company's
business to deliver its strategy, as well as incorrect or
unforeseen assumptions or conclusions (including unanticipated
costs and liabilities) relating to business development activity,
including the sale of a stake in its UK Gas Transmission and
Metering business, its strategic infrastructure projects and joint
ventures and the separation and transfer of the ESO to the public
sector. For further details regarding these and other assumptions,
risks and uncertainties that may impact National Grid, please read
the Strategic Report section and the 'Risk factors' on pages 226 to
231 of National Grid's Annual Report and Accounts for the year
ended 31 March 2024, which is published today. In addition, new
factors emerge from time to time and National Grid cannot assess
the potential impact of any such factor on its activities or the
extent to which any factor, or combination of factors, may cause
actual future results to differ materially from those contained in
any forward-looking statement. Except as may be required by law or
regulation, the Company undertakes no obligation to update any of
its forward-looking statements, which speak only as of the date of
this announcement.