Mainstream stock gets €50m of investor demand
'Grey market' deal suggests valuation of €540m for renewables company as new investors come on board
Mainstream Renewable Power has attracted €50m of investor demand for shares made available on a private trading venue.
The privately-held company put in place a so-called grey market to allow investors to either buy into, or sell out of, the business. Everyone who wanted to sell was matched with a buyer, the Irish Independent understands.
A price of €9 was put on each share - suggesting a value of some €540m for Mainstream after the grey market sale closes. That's a discount to the company's view that it is worth €11.70 a share, communicated to shareholders in a letter in August.
Mainstream told shareholders it would set a price that would make buying Mainstream shares "an attractive investment opportunity for incoming third-party investors".
"Attracting new third-party investors is an important element in achieving a successful and liquid grey market," the company told shareholders.
The share sales are expected close next month, with another grey market providing another opportunity for investors to enter or exit the company expected to launch in the middle of next year.
The company settled on the grey market option, having said for some time it was seeking a mechanism that would allow investors to sell their shares.
Two investors, Barclays and a Japanese company called Marubeni, have exited the business on foot of the deal.
Separately, the company announced yesterday that it has put in place a new €90m debt facility.
The money comes via HSBC and DNB Bank. Mainstream can increase the facility to €200m if it can bring in new lenders, subject to the approval of HSBC and DNB.
The funds will be used to develop Mainstream's various projects around the world.
Mainstream said the first tranche is likely to be used for commitments relating to a massive 1.3 gigawatt (1,300 megawatt) planned project in Chile.
Mainstream group CEO Andy Kinsella said the deal would give the company "the freedom to pursue large-scale development opportunities around the world".
"First up, it will help us to fund the first phase of our fully-contracted 1.3-gigawatt Andes Renewables wind and solar platform in Chile, where our assets are ensuring renewable energy continues to outcompete both new and existing fossil-fired generation".
Michael Lalor, head of corporate banking for Ireland at HSBC, said the deal would help the bank in "advancing our global green credentials while also highlighting the strength of our network and trade finance".
Having sold a massive offshore wind farm project in Scotland for more than €600m, Mainstream is now looking to build out various renewable projects in countries around the world, including the Chile project.
It has said it does not see itself as a long-term holder of assets - preferring to sell projects to long-term investors. Renewable assets are often attractive to pension funds because they provide a steady stream of income.
Mainstream is chaired by Eddie O'Connor, who founded the business after the sale of Airtricity, which he also founded, to SSE for €2.2bn.