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Renewable Energy Holdings has gained shareholder approval for the sale of its German wind interests to Allianz Renewable Energy Management for €39.8m and this will give it the cash to move forward with its other wind power projects.
The selling price includes €2m that is deferred and will be in the form of performance bonds for a two year period following closing of the deal. The cash covers warranty claims and energy loses relating to any crack down on noise levels at the sites. The deal should be completed by the end of September.
Wind speeds at the German wind power sites have not been as high as originally expected. This made the debt-financed acquisition less attractive and it made sense to sell the assets. The operations lost £840,000 on revenues of £4.5m in 2009.The net asset value was £12.95m.
REH will use €30.4m of the proceeds to pay off debt. Most of the rest of the cash will be invested in the Kobylany wind farm project in Poland. REH is talking to banks about the finance for this project.
Net group debt was £27.3m at the end of 2009.
The main focus will be the Kobylany project and the Mynnydd y Gwynt wind power project in Wales. REH has sold its Welsh landfill gas operation for up to £2.75m and its CETO wave power technology has been swapped for 232.6m shares in Carnegie Wave Energy, equivalent to 29.1% of the ASX-listed company.
A commercial scale CETO 3 deployment is on target to be completed by the end of 2010. The site is to the west of Garden Island off Perth in Western Australia. A licence has been awarded to Carnegie which will enable it to site a wave energy project south of Sydney, off Eden, in New South Wales
At 10.25p a share, REH is valued at £7.13m.
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