Handful of US suitors vying for SWS's wind farm assets
A handful of US infrastructure funds are understood to be in the final shake-out to buy wind farm assets being sold by SWS, the Cork-based energy and business services group.
The potential suitors are vying to acquire SWS's 180 megawatts of operating wind farm assets around the island of Ireland.
Bidding for these assets is believed to be running north of €400m, including the assumption of debt attached to the projects.
An information memorandum circulated by Royal Bank of Canada, which is managing the sale, projects that the wind farms will turn in €35m of earnings before interest, tax, depreciation and amortisation (EBITDA) next year.
As part of a deal, SWS could continue to operate the wind farms on behalf of the buyer.
Infrastructure funds look for investments with steady, long-term returns, and have emerged as a favourite of pension funds in recent years.
And though the credit crisis has made fundraising more difficult for the sector, experts say there continues to be an appetite globally for funds that back renewable projects with a proven technology.
SWS is also considering selling its entire wind farm business, which includes a further 400MW in development. Almost half of these are ready to be built over the next two years.
It is believed that the entire business, which ranks second to Airtricity among Ireland's largest wind energy firms, carries an enterprise in excess of €500m. This includes some €200m of project debt.
A number of trade buyers, reported to include Bord Gais, EBS, General Electric and Endesa, have expressed an interest in the entire portfolio in recent months. EBS is known to have since exited the process.
However, market sources suggest that SWS is more likely at this stage to just dispose of the wind farm assets that are up and running, with a view to using the proceeds to develop the pipeline projects.
They said a preferred bidder could emerge by the end of October.
SWS Group was acquired in late 2006 for €110m by Ion Equity, a Dublin-based boutique investment firm, from a collection of Munster co-ops led by Dairygold.
SWS Natural Resources was spun out in 2007 from the broader group, paving the way for a €104m equity and debt fundraising.
The division is 40pc owned by Ion Equity, while private investors hold a 35pc stake, with Anglo Irish Bank accounting for a further 15pc and management an additional 10pc.
- Joe Brennan
