SIMEC Atlantis PLC has reportedly made plans to acquire hydro-generation portfolio from its largest shareholder for £124.7 million in total. As per trusted sources, the company has entered into a conditional agreement to buy Green Highland Renewables from SIMEC group, which is a part of the GFG Alliance that owns 49.99% of Atlantis.
Under the terms of the agreement, Atlantis will make an upfront payment comprising £14.85 million in cash for some existing debt and SIMEC GHR’s equity as well as additional £95 million raised by long-term project finance, cite trusted sources.
According to sources familiar with the development, GHR presently owns a portfolio consisting of 15-mini projects with an operational capacity equaling 20MW that comes with a 20-year fixed price feed-in-tariff payments linked to inflation. Moreover, there is an additional project in construction and one more undergoing development that can add another 8MW.
Reportedly, GHR posted revenues worth £6.6 million within nine months to September, operating profits worth £2 million and a loss of £1.65 million. Atlantis expects the deal to enhance earnings and cash flow immediately amid significant revenue growth anticipated between 2019 & 2021.
SIMEC’s objective is to retain its shares in the enlarged group at 49.99% even if Atlantis issues shares to fund the initial consideration.
Tim Cornelius, Chief Executive of Atlantis was quoted saying that in recent years, the proposed acquisition is one of the most exciting developments for the company. He further stated that SIMEC GHR’s management team is globally acclaimed for its capabilities in mini-hydro development, operations, construction, and maintenance. They have further developed a unique portfolio comprising of operating assets in the UK that is impossible to replicate owing to recent changes in the legislation, Cornelius added.
Reportedly, SIME Atlantis owns a portfolio of tidal power projects and the Uskmouth power station located in Wales, which the company plans on converting into a waste to energy operation.