Just Energy has announced it is to sell Hudson Energy Supply UK to Shell Energy for up to £10.8 million.
It says the sale of its UK operations will enable it to streamline its operations and narrow its geographic focus, with the added benefit of increasing liquidity.
The deal will see Just Energy receive £2 million at closing and the firm expects additional payments of up to £8.5 million to be paid, depending on whether Ofgem or the Department for Business, Energy and Industrial Strategy (BEIS) reinstate capacity market payments in the UK within a specified period of time.
Once the deal is concluded, Hudson UK will operate as a wholly-owned subsidiary of Shell Energy Retail Limited – the transaction is subject to a number of conditions, such as merger control approval.
If all goes to plan, the acquisition is expected to close by the end of 2019.
Scott Gahn, President and CEO of Just Energy, said: “The sale of our UK operations is part of our broader strategy to concentrate on our higher-margin North American operations, while also improving our liquidity.
“As well as refocusing our geographic footprint, we have undertaken an in-depth review of our operations and identified ways to improve our business by boosting efficiency and lowering costs.”
Just Energy says it has identified another £12.3 million a year in cost savings.