(Alliance News) - Smart Metering Systems PLC on Thursday said it has sold a minority of its metering assets for GBP291 million gross.
The metering services company said the UK assets were sold to funds managed by investment company Equitix Investment Management Ltd.
Net cash after expenses is expected to be GBP282 million.
Smart Metering said the sale will allow the company to implement a long-term, sustainable dividend payment policy and will result in a "significant" reshaping of its capital structure. The company proposed a dividend of 25 pence for 2020, with the payout expected to increase in line with UK retail price index until 2024.
"This transaction realises considerable cash returns and demonstrates the substantial value of our smart meter portfolio. It also will enable us to enhance greatly shareholder value with significant and sustainable increase in dividends - underpinned by our asset-backed, inflation-linked, recurring revenue stream," said Chief Executive Alan Foy.
Separately, the company said its existing debt has been fully repaid and it has amended its GBP300 million revolving credit facility on the same terms.
As at the end of 2019, Smart Metering had a portfolio of over 1.2 million domestic smart meters and an order book of a further 2 million meters expected to add around GBP40 million to the company's index-linked annualised recurring revenue.
Results for 2019 are expected to be in line with market expectations and will be published on March 17.
Shares were trading 8.7% higher at 496.50 pence each on Thursday morning in London.
By Ife Taiwo; ifetaiwo@alliancenews.com
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