Fulcrum Utility Services to sell domestic customer gas connection assets and order book for £33mn

gas connection

LONDON, UK: Fulcrum Utility Services Limited has entered into a conditional sale and purchase agreement to sell its domestic customer gas connection assets, including the order book and associated meters, to E.S. Pipelines Limited for £33 million in cash.

The sale significantly strengthens Fulcrum’s balance sheet. The Company will repay existing borrowings of approximately £12 million in full on completion, and has started the process of exploring replacement facilities better suited to the requirements of the Group.

Fulcrum intends to commence a share buy-back programme anticipated to return approximately £4 million to shareholders over the next four years. The buy-back programme will track the expected build out and realisation profile of the balance of the assets.

Fulcrum will retain its Independent Gas Transporter (IGT) and Independent Distribution Network Operator (IDNO) licences. The Company will continue to grow its design and build activities in the industrial and commercial (I&C) segment of the market, both working with ESP as an asset adopter under an arrangement entered into at the same time as the sale and, where appropriate, continuing to independently design, build and add I&C assets to its own portfolio of assets.

In the domestic segment of the utilities market, Fulcrum will continue to grow its gas and electrical connection design and build activities, but will not adopt assets once completed; ESP will be Fulcrum’s preferred asset adopter.

The sale will also allow the Group to more actively pursue opportunities for growth in the multi-utility infrastructure market.

Philip Holder, Fulcrum’s Chairman, commented: “This transaction realises substantial value for the Company’s existing and contracted domestic gas assets. It significantly strengthens our balance sheet and will provide a basis for a return of capital to shareholders.

Fulcrum’s core growth strategy will focus on its design and build activities, as well as on continuing to adopt assets in its traditional I&C market where appropriate. Our new relationship with ESP will enhance the Company’s capabilities in the future in all segments of the market.”

 

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