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SIMEC Atlantis Energy acquires Scottish hydro-generation portfolio from major shareholder

GHR has a portfolio of 15 mini-projects with total operational capacity of 20Mw

Hydro power
GHR has eleven sites in Scotland

Renewables group SIMEC Atlantis PLC (LON:SAE) is to diversify into hydro generation through the acquisition of a portfolio of assets from its major shareholder for £124.7mln in total.

A conditional agreement has been reached to acquire Green Highland Renewables from SIMEC group, part of the GFG Alliance that owns 49.99% of Atlantis.R

READ: SIMEC Atlantis Energy inks collaboration agreement for Normandy tidal power project

Terms will see Atlantis pay £29.7mln upfront comprising cash of £14.85mln for SIMEC GHR’s equity and some existing debt, with a further £95mln secured by long-term project finance.

GHR has a portfolio of 15 mini-projects with a total operational capacity of 20Mw that come with inflation-linked 20-year fixed price feed-in-tariff (FiT) payments.

In addition, there is one project under construction and one project in development that can add a further 8Mw.

GHR posted revenues of £6.6mln in the nine months to September, operating profits of £2mln and a loss of £1.65mln.

Atlantis expects the acquisition to boost earnings and cash flow immediately with strong revenue growth expected between 2019 and 2021.

Simec intends to maintain its stake in the enlarged group at 49.99% even if Atlantis issue shares to pay for the initial consideration.

Tim Cornelius, Atlantis’s chief executive, said:  "This proposed acquisition is one of the most exciting developments in the recent history of Atlantis.

“The management team at SIMEC GHR are world renowned for their mini-hydro development, construction, operations and maintenance capabilities.

“They have built a unique portfolio of operating assets in the UK that cannot be replicated due to recent changes in legislation.” 

Sime Atlantis has a portfolio of tidal power projects and owns the Uskmouth power station in Wales, which it intends to convert into an energy from waste operation.

Quick facts: SIMEC Atlantis Energy

Price: 9.35 GBX

Market: AIM
Market Cap: £40.12 m

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on 11/5/18

2 min read