Bord Gais nears deal in €500m windfarm acquisition
Others waiting in the wings if bid for SWS assets fails
Bord Gais is looking to acquire the windfarm assets of Cork-based energy firm SWS. Photo: Getty Images
Related Articles
Tuesday December 01 2009
BORD Gais is in exclusive talks to acquire the windfarm assets of SWS, the Cork-based energy and business services group, with some sources indicating that bidding topped the €500m mark.
SWS's wind energy division comprises 180 megawatts (MW) of operational farms around the island of Ireland and a 400MW development pipeline.
It is 40pc owned by Dublin-based boutique investment firm Ion Equity. Some 35pc of the business is held by private investors assembled by Anglo Irish Bank a few years ago, with an additional 17pc in the hands of the nationalised bank.
A group of company managers headed by Tim Cowhig, owns the remaining 8pc.
Any deal would also include €225m of debt attached to various wind projects.
Sources close to the auction said other interested parties were waiting in the wings should a Bord Gais deal fall through.
It is understood that one of the potential private equity suitors has pitched an alternative option of acquiring the half of the business owned by Anglo and its clients, who may be under more pressure to sell.
Bord Gais, which entered the residential electricity market last February, has already outlined plans to invest €1.2bn in wind energy projects over the next five years as it continues to diversify from its core business.
Earlier this year, the Dail approved a hike in the semi-state body's statutory borrowing limit from €1.7bn to €3bn.
Approval
Still, the company must have any acquisitions approved by both Energy Minister Eamon Ryan and Finance Minister Brian Lenihan.
Bord Gais would have to give both ministers a compelling reason why it plans to pay a price in excess of a bid arrived at by fellow semi-state ESB, which dropped out of the auction a number of months ago.
Back in September, it appeared that Ion Equity was ready to sell just the 180MW of assets that are up and running, which were projected to turn in €35m of earnings before interest, tax, depreciation and amortisation (EBITDA) next year.
The proceeds would have enabled SWS to continue to invest in its pipeline portfolio, but it now looks likely that the whole business will be sold.
The entire SWS Group was acquired in late 2006 for €110m by Ion Equity from a collection of Munster agricultural co-ops.
SWS's natural resources division was spun out in 2007, paving the way for a €104m equity and debt fundraising, which brought Anglo and its clients on board.
- Joe Brennan
Irish Independent
