Saturday 27 August 2016

Gaelectric preparing to sell off €750m of windfarms

Published 25/02/2016 | 02:30

Gaelectric owns 13 windfarms in Northern Ireland and nine in the Republic. Photo: Keith Arkins
Gaelectric owns 13 windfarms in Northern Ireland and nine in the Republic. Photo: Keith Arkins

Irish energy firm Gaelectric is eyeing a sale of a stake in, or all of its operational windfarms, in a deal that could place a €750m enterprise valuation on the assets, it's understood.

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The enterprise value includes debt and equity, but even with the debt attached to those assets stripped out, the assets could still have an equity value of between €250m and €350m, the Irish Independent understands.

Any proceeds would be used to further develop Gaelectric's other renewable energy assets and projects, which include energy storage, solar and bioenergy, as well as energy trading.

A sale could include part or all of about 200 megawatts of wind energy output, spread over about 23 windfarms that are owned by the company.

Gaelectric, which was founded in 2004, owns 13 windfarms in Northern Ireland and nine in the Republic.

Yesterday, it announced the completion of the acquisition of the 46MW Cloghboola windfarm in Co Kerry for €60m from Enercon, using hybrid project financing secured through Nord/LB. It comprises 16 turbines, and can generate power for almost 30,000 homes.

That windfarm is also among the assets being pitched to potential buyers of Gaelectric's operational estate, it's understood.

Industry publication 'Sparkspread' first revealed this week that Gaelectric has tasked investment bank Rothschild to examine potential deals. An actual auction of the assets hasn't yet formally begun, it noted.

A spokesman for Gaelectric, which is headed by co-founder and chief executive Brendan McGrath, declined to comment.

The Irish Independent understands that Gaelectric could decide to sell all its operational windfarms, however, and that it could continue as an operator and maintenance provider under sales terms.

However, the final make-up of a deal would probably depend on whether or not a buyer is an institutional investor or in the trade.

It was recently reported that US private equity giant Lonestar now has an 8pc stake in Gaelectric after the American firm acquired debts owed by Gaelectric's co-founder, Eamonn McGrath, to IBRC.

However, it's believed that would not pose any obstacle to a sale of the operational windfarms.

Gaelectric has a target of having 400MW of operational windfarms by 2017 - but that includes the 200MW of so of assets it is currently lining up for a sale.

Last year, Gaelectric signed an agreement with Irish firm Oriel to develop a 15MW offshore windarm in the Irish Sea at a cost of €80m.

That's part of a much bigger planned project called the North Irish Sea Array, which could eventually extend to being a huge 870MW windfarm.

Gaelectric is also developing a major energy storage project in Larne, Northern Ireland.

The scheme involves the creation of two vast storage caverns more than 1.4km beneath the Antrim coast.

The storage project, which uses compressed air, will be able to generate up to 330MW of power for up to six hours, and will create demand for 200MW of power during its compression cycle.

Gaelectric also has interests in the United States. The company is one of the largest owners of wind development rights in Montana.

It has over 30,000 acres under option for lease agreements for its proposed 235MW Jawbone wind project in the State.

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