Centrica to increase buybacks after US power station disposal

18th Dec 2013 12:41

Centrica pledged to increase its buyback programme after agreeing the sale of its Texas gas-fired power stations.The owner of British Gas was the highest FTSE 100 riser at lunchtime on Wednesday as its US subsidiary, Direct Energy, agreed the $685m (£420m) disposal of three power stations to private equity giant Blackstone.Centrica said it would return the proceeds to shareholders through a £420m extension of its share repurchase programme over the course of 2014.As part of the transaction, Direct Energy has entered into a three-year call option arrangement with Blackstone for an equivalent amount of capacity as produced by the power stations.Direct Energy's President and Chief Executive Officer Badar Khan said: "This transaction allows us to realise value from our gas-fired fleet, while ensuring stability of price and supply in the Texas power market through the call option arrangement."Residential retail supply is key to our North American business, and with sufficient generation capacity in Texas, we can support our downstream business through contractual arrangements, rather than asset ownership."The transaction is subject to customary regulatory approvals and is expected to close in the first quarter of 2014.Shares in Centrica were up 3.1% to 333.1p at 12:50 on Wednesday.OH