REG - National Grid PLC - Rule 135c notification - £7bn Rights Issue

National GridAnnouncement

23/05/2024 07:15

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RNS Number : 5576P  National Grid PLC  23 May 2024

 

 

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                                                                      23 May 2024
 Issue........................................................................
 Admission and commencement of dealings in New Shares, nil paid, on the London               8.00 a.m. on 24 May 2024
 Stock
 Exchange...............................................................................

 

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.

 

 

 

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