Greencoat Renewables has agreed to sell a portfolio of six Irish onshore wind farms to Norway's HitecVision for €156m.
The renewable energy infrastructure investor said that the sale of wind assets totalling 115.7MW in net capacity would consist of €139m upfront and €17m in non-contingent deferred consideration over 2026 and 2027.
The firm will sell 100% stakes in five assets totalling 65.7MW as well as a 50% stake in one of the larger assets in portfolio of approximately 50MW. Additionally, Greencoat will "assess future value creation opportunities at the jointly owned wind farm" with HitecVision.
The sale is expected to close next month, and Dublin and London-listed Greencoat said the proceeds would go towards reducing the €201m drawn balance on its revolving credit facility.
As a result, Greencoat's gearing levels, ie the amount of debt that the company uses to fund operations in relation to equity, will decline from 54% to 51%, and the company intends to reduce gearing over the medium term to a level below 50%.
The disposal follows on from the sale of Greencoat's Kokkoneva wind farm in Finland that was announced in November, and the company has raised more than €200m from both sales to increase its capital allocation options for the future.
Greencoat is also in advanced negotiations to sell a significant minority stake in its 50MW Andella wind farm in Spain, the proceeds from which will also be allocated to repayment of the revolving credit facility.
Earlier this month the company announced the signing of a second corporate power purchase agreement (PPA) with Keppel DC REIT to supply power to two data centres in Dublin for 10 years.
The contract is included in the disposed portfolio. Greencoat has entered into six PPAs since the launch of its re-contracting strategy, representing c. 20% of its five-year merchant volumes.
"This transaction reflects the disciplined execution of our capital allocation strategy, unlocking value from our portfolio and further enhancing our financial strength," said Paul O'Donnell, partner at Schroders Greencoat LLP, which manages Greencoat Renewables.
"In the last six months, we have successfully executed disposals that total more than €200m of gross proceeds, delivering value above our original investment.
:We continue to see significant opportunities in the growing European renewable market for Greencoat Renewables to create value for its shareholders.
"As well as providing future balance sheet flexibility, this latest transaction underpins the opportunity to create increasing value from older assets including re-contracting PPAs and options for hybridisation and repowering."
Greencoat Renewables has also announced plans to apply for a second inward listing on the Alternative Exchange of the Johannesburg Stock Exchange, where it has received strong interest from a number of South African institutional investors.
The company believes trading shares in Johannesburg will enhance liquidity for shareholders, diversify its shareholder basis, and position the company for growth with access to a new and deep capital market.
The listing is expected to become effective later this year, but no new shares will be issued as part of the listing, and the company will remain listed on the Euronext Growth Market in Dublin and the Alternative Investment Market in London.
(Pic: Getty Images)
