Regulatory implications for Phoenix Natural Gas of East Surrey Holdings take-over

Ofreg consultation (PDF, 22 pages) on the possible regulatory implications for the downstream gas industry in Northern Ireland of the take-over of the multi-utility East Surrey Holdings by Terra Firma and Kellen. Ofreg notes that the proposed transaction "has revealed new information about the potential value of Phoenix", and calculates that the price implies a premium of 13-18 per cent over the regulatory capital value. The document proposes that this should be taken into account in ongoing negotiations to transfer the transmission business to a debt-funded "mutualised" entity, and suggests that a reduction in the allowed rate of return on capital may be appropriate. Responses by Wednesday 15 June 2005.

For further information or advice please contact Franck Latrémolière.

Filed under Electricity, Gas, Ofreg, Water.

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