DONG Completes Oil & Gas Unit Sale, Becomes Pure Play Renewables Company
DONG Energy today agreed to divest the entire share capital of DONG E&P A/S to INEOS.
“The transaction completes the transformation of DONG Energy into a leading, pure play renewables company,” Henrik Poulsen, CEO of DONG Energy, said.
To remind, at the beginning of this year, DONG Energy announced it had also decided to entirely phase out the use of coal as fuel at its power stations by 2023.
The company is selling the oil and gas business to INEOS for an unconditional payment of USD 1,050 million (DKK 7.0 billion) on a cash and debt free basis, a contingent payment of USD 150 million (DKK 1.0 billion) related to the Fredericia stabilisation plant, and a contingent payment of up to USD 100 million (DKK 0.7 billion) subject to the development of the Rosebank field.
The transaction is expected to result in a gain on sale of enterprises of approximately DKK 2.5 billion including the contingent payment related to the Fredericia stabilisation plant. The gain will be presented as part of net profit from discontinued operations in DONG Energy’s financial statements after closing, the offshore wind major said. Of the USD 1,050 million unconditional consideration, USD 250 million (DKK 1.7 billion) will be payable from 2018 to 2020.
Closing of the transaction is subject to regulatory and certain other third party approvals and is expected to take place in the third quarter of 2017.
“Since the decision in 2016 to divest our upstream oil and gas business, we’ve actively worked to get the best transaction by selling the business as a whole, getting a good and fair price for it and ensuring the optimal conditions for the long-term development of the oil and gas business. With the agreement with INEOS we’ve obtained just that,” Poulsen said.