updated 8/31/2004 11:20:58 AM ET 2004-08-31T15:20:58

The British power and gas system operator National Grid Transco PLC has sold four regional natural gas distribution networks and will return 2 billion pounds ($3.6 billion, 3 billion euros) to its shareholders, the company said Tuesday.

National Grid Transco said it would net 5.8 billion pounds ($10.4 billion, 8.6 billion euros) from the sales and planned to return 2 billion pounds ($3.6 billion, 3 billion euros) to shareholders, cut debt by 2.3 billion pounds ($4.1 billion, 3.4 billion euros) and raise its dividend this year by 20 percent to 23.7 pence ($0.43, 0.35 euro) a share. It will also let annual dividends increase by seven percent through March 2008.

The sale prices for the networks, which move gas around Britain to residential and commercial distribution points, were at the high end of what markets expected.

National Grid said it sold its network in northern England to a consortium led by Hong Kong's Cheung Kong Infrastructure Holdings Ltd. and United Utilities PLC for 1.4 billion pounds ($2.5 billion, 2.1 billion euros).

Its Wales and western England system will go to a group led by the Macquarie European Infrastructure Fund, which is managed by Australia's Macquarie Bank Group, for 1.2 billion pounds ($2.2 billion, 1.8 billion euros).

The Scotland and southern England networks were being bought for 3.2 billion pounds ($5.7 billion, 4.7 billion euros) by a consortium made up of Scottish and Southern Energy PLC and Canada's Borealis Infrastructure Management Inc. and Ontario Teachers Pension Plan.

The sales must be approved by regulators.

National Grid will keep four other distribution networks, covering the west Midlands, London, eastern England and northwestern England, reaching a total of 11 million customers.

The company's chief executive Roger Urwin said it remains interested in boosting its electricity transmission holdings in America.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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