Duke Energy selling minority stake in Duke Energy Indiana

Duke Energy said it recently sold an 11 percent minority interest in Duke Energy Indiana to an affiliate of GIC Private Limited, Singapore’s sovereign wealth fund, a transaction that will help the company fund a capital plan that focuses on clean energy investments.

In the first of a two-phase sale transaction with GIC, Duke received cash proceeds of $1.025 billion. Overall, GIC will acquire a 19.9 percent indirect minority interest in Duke Energy Indiana (DEI) for a total purchase price of $2.05 billion in two separate phases. Charlotte, N.C.-based Duke Energy said it would remain majority owner and sole operator of DEI.

The proceeds from this transaction will help fund the company’s $59 billion capex plan and satisfy all equity capital raising needs through 2025. The second part of the transaction will close no later than January 2023.

“We are pleased to have GIC as a long-term investor in DEI, underscoring the value and growth potential of our Indiana operations,” Lynn Good, Duke Energy’s chair, president and CEO, said. “This transaction will allow us to accelerate our clean energy strategy across our regulated utilities and continue delivering sustainable value to our customers, communities and investors.”

GIC is investing in an intermediate holding company of which DEI is a wholly owned subsidiary. The transaction received approval from the Federal Energy Regulatory Commission (FERC) and the Committee on Foreign Investment in the United States (CFIUS).

“Our commitment to Indiana is strong and steady. This partnership with GIC reflects the extraordinary value Duke Energy and its employees have and will continue to create here in Indiana,” Stan Pinegar, DEI state president, said. “Delivering safe, reliable, affordable and increasingly cleaner energy to our customers and serving our communities is our top priority.”

J.P. Morgan Securities served as Duke Energy’s lead financial advisor, while Centerview Partners also served as a financial advisor. Barclays served as GIC’s exclusive financial advisor.

“As a long-term investor, GIC strongly believes that companies focused on meaningful sustainability practices will create better risk-adjusted returns over the long term. We are committed to actively engaging with Duke Energy’s management team to support their clean energy transition goals and build long-term sustainable value,” Ang Eng Seng, GIC’s chief investment officer of infrastructure, said.