Noticed an article on Friday which built upon the Thurs National Grid announcement that they had sold a part of their American assets. The article suggested that NG continues to have problems with American regulators around requested price rises with approved increases being discounted by 50% or more. The upshot being that the UK operation has margins up to 3 times that of the US operation enabling infrastructure investment and upgrades.
It also proposed that NG should consider selling out of the majority of its US operations to concentrate on the UK. In addition, these asset sales could help to contribute to the proposed 5 year infrastructure investment program that led to the recent rights issue.
The article went on to suggest that divesting its low margin, politically constrained US businesses would unshackle NG's share price to some degree.
It will be interesting to see how this unfolds given the concerns over NG debt levels.
In other news R-R fell yesterday on comments from Airbus' (EADS) Chairman that R-R could have been more pro-active with its communication on the A380 incident, his concession that this could only be done on the basis of facts being lost on the audience.
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