National Grid Transco plans to return £2 billion to its shareholders, following the completion of the sales of four of its gas distribution networks.
Britain's largest power network operator, which employs around 1,500 people at its headquarters at Warwick Business Park, had already announced its intention to return cash to shareholders, but not revealed how much.
Shareholders will receive one B share for each National Grid Transco share held and can choose between receiving a 65p dividend for each share - after which they will be converted into deferred shares - or sell the B shares for 65p each.
In conjunction with the return of cash, the company will reorganise the capital, with shareholders receiving 43 new ordinary shares for every 49 existing ordinary shares held on July 29 2005.
National Grid has 1.4 million small shareholders, many of whom inherited the stock following the privatisation of regional electricity companies. The majority of these hold less than 500 shares.
The payout is expected to be made around August.
"The intention is that, subject to normal market movements, the share price of one new ordinary share immediately after listing should be approximately equal to the share price of one existing ordinary share immediately beforehand," Transco said.