Duke Energy has agreed to sell a 19.9% stake in its subsidiary Duke Energy Indiana for $2.05bn. The buyer is an affiliate of Singaporean sovereign wealth fund GIC Private.
Duke Energy plans to utilise proceeds from the sale to fund its five-year capital plan, which its has increased to between $58bn and $60bn. The proceeds will also go toward redeploying capital to support increased growth investments in its regulated utilities portfolio.
The company said that the acquisition will enable it to forego its previously announced plans for raising $1bn of common equity.
Upon completion of the deal, the company will continue to operate DEI with an 80.1% stake in the business.
The company will receive the proceeds from GIC in two evenly split payments. The first payment will be made in the second quarter of the year, with the second payment occurring no later than January 2023.
Duke Energy chair, president and CEO Lynn Good said: “This agreement with GIC allows Duke Energy to not only partner with a highly respected global investor, it also strengthens our confidence as we increase our long-term adjusted EPS growth rate to between 5% and 7%.
“With this agreement, Duke Energy is well positioned to effectively finance our robust investment plan in a clean energy future and continue delivering sustainable value to our investors.”
The transaction is subject to customary closing conditions, including approval from the Federal Energy Regulatory Commission and completion of review by the Committee on Foreign Investment in the United States.