Centrus advises on innovative £200m early financing of Mutual Energy’s Gas to the West project

Introduction

Mutual Energy, a mutual company, was founded in 2005 with the objective of owning and operating vital energy infrastructure in the long-term interests of Northern Ireland’s energy consumers.

Centrus is pleased to announce that financial close has been reached on the c.£200m financing of Mutual Energy’s ‘Gas to the West project’ in Northern Ireland. The project is an extension of the gas network in Northern Ireland to Coalisland, Cookstown, Derrylin, Dungannon, Enniskillen, Magherafelt, Omagh and Strabane.

Centrus Solution

Centrus acted as sole Financial Advisor to Mutual Energy and has supported the company in the development of its financial and commercial strategy for the Project, from its original bid to be awarded the regulatory licence through to Financial Close. The successful c.£200m finance raising was completed with a single funder, Legal and General Investment Management and will be repaid over c.36 years.

Centrus led the advice on developing the deal structure that enabled long-term 100% debt financing for the project with greenfield risk without undermining the credit rating and ultimately the cost to the consumers of NI. Centrus also added value by inter alia, providing advice on various financing structures and options, obtaining a credit rating, selection of a preferred funder and negotiation of documentation.

“Having worked with the Mutual team for a number of years on the project, we are delighted to have advised them from the successful bid for the licence all the way through to the successful delivery of this innovative financing package. We believe this financing demonstrates the value of the Mutual model with the energy consumers of Northern Ireland gaining the entire benefit of the substantial improvement in the cost of capital in comparison to the 2014 bid position.”

Jason Murphy, Managing Director – Centrus

“Centrus worked tirelessly to help deliver a fantastic deal for customers which means that the cost of debt repayments will be around 35% less than they were expected to be when Mutual won the Gas to the West tender in 2014.  This amounts to an additional saving of about £50m in present value terms over and above the customer savings already expected from the bidding process.”

Gerard McIlroy, Finance Director – Mutual Energy

For more information, please contact jason.murphy@centrusadvisors.com

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