British Gas owner Centrica said today it will sell its North American subsidiary Direct Energy for $3.63 billion in cash as it reported a profit slump in first-half earnings due to impact from Covid-19 and low commodity prices.
Centrica, which owns Bord Gáis Energy here, said it would sell the energy and services company to US integrated power company NRG Energy and use the cash to reduce net debt and contribute to its pension schemes.
It said it would focus on its core home markets, the UK and Ireland, following the sale which its board believes is in the best interests of the company and its shareholders.
"This disposal is aligned to our strategy to become a simpler, leaner business. We intend to use the proceeds to significantly reduce net debt and to make a material contribution to our pension schemes," Centrica said.
Last month, Centrica said it planned to cut around 5,000 jobs, almost 20% of its global workforce, as it deepened its restructuring efforts in the wake of the Covid-19 pandemic.
The group posted a 14% drop in half-year operating profit to £343m from £399m a year earlier. This was due to the pandemic which reduced energy use and weakened commodity prices.
Centrica did not declare an interim dividend.
It also said it had paused the planned divestment of its 20% stake in Britain's nuclear energy fleet and the planned sale of North Sea oil producer Spirit Energy.
