Dong Energy is now a “pure play renewables company” following an agreement to divest the entire share capital of its upstream oil and gas business to Ineos in a deal worth up to $1.3bn.
The Danish company said the deal is made up of an unconditional cash payment of $1.05bn with contingent payments of $150m related to the Fredericia stabilisation plant and $100m subject to development of the Rosebank field.
Dong will book a gain on sale of enterprises of roughly Dkr2.5bn when the dust settles on the deal. Closing of the transaction is due in the third quarter.
“The transaction completes the transformation of Dong Energy into a leading, pure play renewables company,” said chief executive Henrik Poulsen.
“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.”
Ineos will assume all decommissiong liabilities associated with the business. Dong will retain all hedge contracts, currently valued at Dkr1.9bn.
Around 440 employees will transfer from Dong to Ineos. JP Morgan acted as exclusive financial adviser to Dong.
Image: Dong
