Viridian, the electricity group, has sold its Moyle Interconnector for £122 million sterling (€179 million) and plans to use some of the money to reduce its net debt.

The Interconnector is a high-voltage electricity link between power grids in Northern Ireland and Scotland.

It entered commercial operation a year ago, but Viridian said there was limited scope for adding value to the asset.

"Our shareholders will benefit from the premium realised, a fair reward for Viridian's commitment in developing, financing and bringing the Interconnector to successful operation," said its chief executive, Mr Patrick Haren.

It is being sold to a company called Moyle Holdings Ltd, a not-for-profit company made up of the state-owned regulator Ofreg and Team Northern Ireland, an initiative set up to increase infrastructural investment in Northern Ireland.

Viridian owned the Interconnector via a company called Moyle Interconnector Ltd.

The company made a pre-tax profit of £4.8 million for the nine months to December 31st, 2002.

Viridian said in a statement the £122 million would "initially be applied towards a reduction of Viridian's existing net debt". It did not specify how much would be used to pay off debt.

The purchasers are funding the sale via a £135 million long-term index-linked bond, secured on the Interconnector and guaranteed by a company called Financial Security Assurance UK.

The proceeds of the bond will be used to pay Viridian and to meet the expenses of the transaction.

Viridian announced its preliminary results for the year to March 31st on May 15th. They are expected to be broadly in line with expectations.

The company recently announced that its power plant in Huntstown, north Dublin, entered commercial operation in November 2002 and had operated with high levels of availability since then.

More than 90 per cent of its output had been sold to industrial users, with the remainder exported to Northern Ireland.