GE set to sell its energy efficiency business in effort to reduce debt

GE set to sell its energy efficiency business in effort to reduce debt

GE set to sell its energy efficiency business in effort to reduce debt

/ Financial News / Wednesday, 07 November 2018 09:01

US energy behemoth General Electric has announced that it intends to sell its energy efficiency business Current in an effort to raise quick capital to reduce its growing debts.

GE’s fiscal performance has plunged over the last number of quarters and that has prompted the company’s new CEO to make debt reduction a priority. During an earnings conference call last week, GE CEO Lawrence Gulp confirmed that the energy leader will press ahead with its plan to sell its oil services and health business units.

It has been disclosed that private equity firm American Industrial Partners will purchase Current, which specializes in selling energy efficiency technology to commercial, industrial and municipal customers in a transaction that is being projected to be finalized in 2019.

Current sells infrastructure technology such as LED and solar, in addition to a diverse portfolio of digital applications. GE has been reporting the business as part of its Consumer Lighting segment, which brought in $385 million in revenues in the quarter ending September 30, which accounted for only about 1.4 percent of overall industrial revenues.

GE, has aforementioned above has been a pioneering force in the energy industry for decades and has is recognized as a global leader in the sector and has championed a number of industry-leading innovators.  It has become under increasing pressure since announcing a $22.8 billion quarterly loss at the end of last month.

The woeful financial results prompted the US government to launch an investigation into GE’s accounting. The day after the results, Moody's downgraded GE's debt rating, citing the weakness of the company's power business and operational missteps.

The company, which replaced its chief executive in early October, also slashed its dividend to almost nothing. Shares of GE advanced 1.3 percent in mid-morning trading to $9.40.

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