National Grid Restructures US Business, Plans $200 Million Cost Cuts

National Grid PLC (NG.LN) Monday announce a change of group executive responsibilities and a major restructuring of its U.S. business together with a $200 million U.S. efficiency program including job cuts.

MAIN FACTS:

-With effect from April, National Grid is evolving from its current global lines of business model to a regional model supported by global functions, with a tighter jurisdictional and local focus to drive customer value.

-Restructuring will focus the responsibility for all U.S. businesses under Tom King in the new position of Executive Director and President, U.S. from the beginning of April.

-Nick Winser will assume the position of Executive Director, U.K., responsible for all U.K. businesses, and responsibility for the U.K. Gas Distribution business will transfer to him from March 1; Mark Fairbairn, currently Executive Director, Gas Distribution, will step down from the Board and leave at the end of March.

-This evolution of the U.S. structure will be combined with a targeted reduction in U.S. operating costs of around $200 million (GBP125 million) per annum.

-Cost cuts will be achieved primarily through the reduction of around 1200 positions across the U.S. employee base; cuts expected to be reductions in management and administrative positions and, where feasible, will be achieved through voluntary redundancy.

-Senior management appointments into the new U.S. structure have already been made with a 26% reduction in the number of roles; remaining appointments are expected to be completed by August, with the targeted savings run rate of $200 million p.a. achieved by the end of the 2011/12 financial year.

-Estimates that the cost of achieving these efficiency savings will be around $100 million, which Company expects to be incurred primarily in 2011/12.

-Shares at 1410 GMT up 9 pence, or 1.7%, at 555 pence valuing the company at GBP19.47 billion.

-By Ian Walker, Dow Jones Newswires; 44-20-7842-9296; [e-mail]