E.ON, the German utility group in the UK, is preparing to sell a business unit with nine million customers for up to £4bn.

The company is in an advanced stage of negotiations with a consortia of the Abu Dhabi Investment Authority, Canada Pension Fund and Macquarie for its distribution interests, according to the Telegraph.

The sell-off is due to the absence of incentives after the UK Government dismissed direct subsidies to encourage construction, although it agreed to provide backdoor support on carbon prices.

E.ON had recently pulled out of a £1bn bid to develop clean coal technology through carbon capture and storage at its Kingsnorth plant in Kent and transferring work to Holland.

The company has been cutting costs and selling assets to reduce debt levels and further sell-offs are expected when the details of a strategic plan and debt reduction programme is released on Wednesday.