I have already been noting how much commercial property has been taken over by non-UK investors such as sovereign wealth funds, but a report in yesterday’s Times has made me wonder how much of our stock of industrial buildings or civil engineering works may also be foreign owned.
E.ON (a German-owned company) is said to be about to sell off a subsidiary, Central Networks, which operates some of our electricity distribution system (pylons, substations & cables) to a consortium which includes the Abu Dhabi Investment Authority & the Canadian Pension Plan.
In March this year Central Networks formed the UK's first utility connections alliance with Morrison Utility Services.
I got dizzy in the very unaccustomed business of trying to find out who owns Morrison Utility Services. What does “March 2008 – AWG sold Morrison Utility Services to two private equity firms, Cognetas and Englefield Capital. Morrison Utility Services becomes a standalone business” mean exactly?
Still, one of the private equity firms says on its website that they welcome “complex situations and are agnostic on ownership structures”, so perhaps I am not meant to understand.
E.ON are said to be keen to sell their subsidiary to help reduce their £39 billion debt burden in London, & to use the proceeds to invest in faster growth areas in China or Brazil; but sovereign wealth investors & pension funds are keen on power grids because they offer a reliable & well-regulated long term revenue. I wonder if the BBC could solve some of its pension problems via this route.
And although I belong to the school which is persuaded that, at least after 1857, the Empire was more of a financial liability than an asset, when you think that, even a century ago, ‘we’ owned railways, mines, farms, hotels … all over the world it seems disconcerting, in that one wonders where it will all end.
Although my head is in a spin with all this, the news item did help clear up one small mystery for me. The soon-to-be-sold assets of Central Networks include cabling which connects the Peak District to Bristol. This connection presumably in turn explains why so many of the men working on a local E.ON ground source heat exchange project are travelling from the West Country to do so.
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