11 November 2014
Danske Bank is pleased to announce its role as exclusive financial advisor to DONG Energy in the sale of DONG Storage. The asset sold for DKK 2.25bn in a bilateral transaction to state owned entity Energinet.dk.
Process key take-aways
The sales process was carried out on the basis of high transactional complexity. Regulatory provisions with respect to required state ownership of Danish gas infrastructure dictated a bilateral process surrounded by a significant stakeholder element. As such, Danske Bank’s Corporate Finance team in cooperation with DONG Energy tailored a highly customised and dynamic sales process catering to this unique nature. Extensive preparatory work was performed with a focus on diligent documentation of technical, financial, legal and commercial aspects, including thorough analysis of potential synergies from consolidating the Danish gas storage capacity. The process design facilitated and preserved ongoing executional flexibility alongside an intense dialogue with Energinet.dk ensuring an aligned timeline through to completion – e.g. accommodating the extensive formal requirements.
DONG Storage owns and operates Stenlille Gas Storage Facility, which is the largest of two gas storages in Denmark, with a working gas volume of 575 mcm, corresponding to 57% of the total Danish gas storage capacity. The transaction is consistent with DONG Energy's strategy of divesting non-core assets.
Included in the price is a payment from Energinet.dk relating to an earn-out that was part of DONG Energy’s divestment of Lille Torup Gas Storage Facility in 2007 to Energinet.dk. The transaction is subject to approval by the competition authorities and the Danish Ministry of Climate, Energy and Building. Closing is expected to occur end of 2014 or beginning of 2015.
Danske Bank Corporate Finance
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