Potential bidders in the sale of Electricity North West (ENW) have been “spooked” by the Labour Party’s plans to renationalise the network operators, according to reports in the Financial Times.
Final bids in the auction, reportedly being run by Citigroup, were due last month. But sources told the news outlet that the process has been hit by political uncertainty after the Labour party published proposals to take energy networks back into public ownership in May.
The sale of ENW could fetch more than £2 billion and has piqued significant investor interest, according to energy experts.
According to previous reports the five potential bidders include Hong Kong-based Cheung Kong Infrastructure, which holds a 40 per cent stake in UK Power Networks, and the Spanish utility Iberdrola, which owns SP Energy Networks through its parent company Scottish Power.
Three asset management firms were also said to be in the running – Equitix and Brookfield as well as a joint venture between State Grid Corporation of China and China Southern Power Grid.
ENW is jointly owned by infrastructure funds managed by JP Morgan and Colonial First State.
Utility Week has contacted Electricity North West for a response. Citi and JP Morgan Asset Management both declined to comment.
ENW’s chief executive Peter Emery recently admitted that the company is undergoing a strategic review that could lead to a sale of the business.
Speaking exclusively to Utility Week’s sister title Network, he said: “We are undergoing a strategic review. That is no secret. The challenge for me and my senior team is to manage that process efficiently and professionally whilst at the same time run the business as business as usual. What we’ve said is that the strategic review may lead to a sale of the business.”