The leading natural gas business in Northern Ireland
The Phoenix Group (Phoenix) operated a gas conveyance (transmission and distribution) network under a monopoly licence in Northern Ireland. Phoenix was one of three companies within East Surrey Holdings, a public ‘multi-utility,’ which Terra Firma acquired in 2005.
At acquisition, Phoenix owned and operated 3,100 km of distribution pipeline. Although there were significant growth prospects for the business, the instability of the regulatory framework, combined with the relative immaturity of the network, demanded an owner with a strong vision.
Terra Firma and Phoenix worked together with the regulatory authorities in 2006 to agree a mutually satisfactory regulatory framework with transparent and stable gas prices. As many people in Northern Ireland had no experience of using gas, the stabilised pricing allowed them to feel more comfortable about switching to gas.
The build-out of Phoenix resulted in an overall group structured into four integrated businesses: Phoenix Natural Gas; Phoenix Supply; Phoenix Energy Services; and Phoenix Energy Limited. The expansion of the network and an increase in customer connections were driven by accelerating the capital investment programme and setting appropriate returns targets.
In January 2008, Phoenix separated its distribution business from its transmission assets. This facilitated the sale of the transmission division of Phoenix, with the resulting proceeds being used to pay down debt. In 2012, Phoenix sold both its supply businesses as it was felt that future growth of the distribution business was better served with supply in a completely separate ownership.
The Phoenix investment has been realised. In August 2013, Terra Firma sold Phoenix to Utilities Trust of Australia and The Royal Bank of Scotland Group Pension Fund.