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Alkane Energy

  • BY: Andrew Hore |
  • POSTED: 02/03/2009 |

Alkane Energy is selling its remaining stake German generating equipment supplier Pro2.

Deutsche KWK is paying €3.6m for the 38% stake in Pro2 and will also pay back loans of €1.96m due to be repaid in 2013. An initial €1m of the loan will be paid immediately with €460,000 payable at the end of 2009 and €500,000 at the end of 2010.

Any warranty claims will be covered by €720,000 placed in an escrow account. This will be released in 2010 if there are no claims.

The Pro2 stake was valued at £3.5m in Alkane’s balance sheet at the end of June 2008. Management reckons that, taking into account the repayment of past and present loans, Alkane is receiving around book value for the stake. 

Pro2 will be Alkane’s preferred supplier of generating plant for the next two years.

The cash will help Alkane to increase the pace of expansion of its coal mine methane assets.

The coal mine methane and electricity producer also says that its 2008 profits will be ahead of market expectations, but this is down to one-off items, such as foreign exchange gain, sales of surplus leases and non-recurring costs.

At 14p a share, Alkane is valued at £13m.

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