SGN Completes Acquisition of Gas Distribution Network.

TORONTO -- Scotia Gas Networks plc (SGN) today completed the acquisition of the Scotland and South of England gas distribution networks from National Grid Transco plc.

The total value of the acquisitions is C$7.25 billion (Pounds Sterling 3.162b). Of this, C$4.78 billion (Pounds Sterling 2.082b) is being funded by non-recourse borrowings and C$2.48 billion (Pounds Sterling1.08b) is being funded by equity and shareholder loans.

SGN, a holding company for the businesses being acquired, is owned by Borealis Infrastructure Management Inc., an OMERS company; the Ontario Teachers' Pension Plan; and Scottish and Southern Energy. Ontario Teachers' and Borealis each invested approximately C$555 million for a 50 per cent combined stake in SGN; Scottish and Southern Energy owns the remaining 50 per cent of the consortium.

In total, the two networks - now named Scotland Gas Networks and Southern Gas Networks - comprise 73,000 km of gas mains, delivering gas to approximately 5.6 million industrial, commercial and domestic customers.

"I am pleased that this acquisition has been successfully completed," said John Morea, Chief Operating Officer of SGN. "Our priority will be to ensure that SGN distributes gas to its customers in the south of England and in Scotland safely, reliably and efficiently."

Jim Leech, Senior Vice-President, Ontario Teachers', said he is looking forward to a long-term partnership in these gas distribution networks. "We believe this investment will help us pay pensions to the teachers of Ontario by providing stable, long-term returns. The U.K. gas sector has a sophisticated and transparent regulatory framework that provides a strong environment for private investment. We are looking for similar opportunities to build our infrastructure portfolio both at home and abroad."

OMERS President & CEO Paul G. Haggis commented, "We're very pleased to be a part of this consortium. OMERS continues to realign its asset mix, shifting a portion of capital from publicly traded investments to infrastructure and private equity assets. In the future we will look to invest about 15 per cent of the Fund in infrastructure assets, as compared to the current 3.5 per cent."

"Infrastructure assets such as this are a great fit for pension plans - they provide long-term, stable returns to pay pensions. We are excited about the opportunity to pursue similar opportunities in Canada and look forward to seeing the results of recent government efforts to develop and encourage these kinds of investments."

OMERS is one of Canada's largest pension funds, with about $36 billion in assets. OMERS recently announced an asset mix strategy which will see a shift from four per cent of its assets invested in infrastructure today to 15 per cent over the next few years. It provides retirement benefits to 355,000 members on behalf of 900 local government employers across Ontario.

The Ontario Teachers' Pension Plan is an independent corporation responsible for investing the fund's $85 billion in assets and for administering the pensions of Ontario's 255,000 active and retired teachers. Ontario Teachers' has global infrastructure and timberland assets of more than $3 billion and is actively seeking to expand its portfolio of electrical transmission systems, oil export pipelines, toll highways, power generation and airports.

Scottish and Southern Energy is one of the U.K.'s largest energy companies. It is involved in the generation, transmission, distribution and supply of electricity to industrial, commercial and domestic customers; the storage and supply of gas; electrical and utility contracting; domestic appliance retailing; and telecoms. It is listed on the London Stock Exchange.