Dong Energy has signed an agreement with a consortium of investors for the sale of its 832 MW gas fired power plant in South Wales.
The consortium of investors, led by Macquarie Group's Infrastructure and Real Assets business has agreed to pay £350 million in cash for the Severn power plant, which is located near Newport. The agreement includes an earn-out based on the future gross margin of the power station.
Thomas Dalsgaard, executive vice president of Dong, said:
"We have succeeded in divesting the Severn power station at a satisfactory price in a difficult market. The divestment is an important element of [Dong's] strategy to divest non-core assets and thereby strengthen the capital base for the benefit of the future development of the company."
The Severn power station is able to generate power for approximately 1.5 million British households, and it is one of the most efficient natural gas-fired power stations of its type in the UK, according to Dong. It started commercial operation in November 2010.