Greencoat UK Wind raising cash to buy Scottish wind farms – Greencoat UK Wind (UKW) has entered into agreements to acquire 49.9% stakes in the Stronelairg and Dunmaglass wind farms from SSE (in partnership with a major UK pension fund whose investment is also managed by Greencoat Capital). UKW will acquire a net 35.5% stake in the wind farms for a consideration of GBP452m (including cash and working capital), while the UK pension fund will acquire a net 14.4% for GBP183m. SSE will continue to hold the remaining 50.1%.
Stronelairg wind farm is located near Fort Augustus, Scotland, and has an installed generating capacity of 228MW. The 66 turbine wind farm was commissioned in December 2018 and has a load factor of 43%. Dunmaglass is located 15 miles south of Inverness and has an installed generating capacity of 94MW. The 33 turbine wind farm was commissioned in December 2017 and has a load factor of 44%. SSE will continue to operate both wind farms with Vestas and GE providing turbine operation and maintenance for Stronelairg and Dunmaglass respectively.
£131m fundraise
UKW is seeking to raise up to GBP131 million through a placing of new ordinary shares to institutional investors at 127p per share. Following the completion of the acquisitions (targeted for 29 March 2019), and assuming that the maximum amount has been raised under the placing, the company expects to have GBP794m of outstanding debt (of which GBP400m is long term debt), which would be equal to 34% of UKW’s gross asset value.
Tim Ingram, chairman of UKW, commented: “I am delighted to announce the acquisition of these two high load factor, ROC accredited wind farms, which will deliver attractive investment returns. This transaction builds on our longstanding relationship with SSE and we are delighted to be co-investing with a major UK pension fund partner.”
Laurence Fumagalli of Greencoat Capital commented: “We are pleased to add two more large wind farm investments to our portfolio, located close to our existing capacity in the Highlands. We continue to see a strong pipeline of acquisition opportunities, and our independence and our proven track record in execution and operations makes us an attractive partner for utility vendors looking to recycle capital.”
Jim Smith, managing director designate of SSE Renewables, said: “We are delighted to partner again with Greencoat UK Wind with the sale of stakes in Stronelairg and Dunmaglass. The sale is in line with SSE’s strategy to create value from development and operation, as well as ownership, of assets. SSE Renewables is committed to driving the transition to a low carbon future, and through our efficient operation of onshore wind farms like these we will continue to help decarbonise the UK’s electricity generation mix.”
UKW : Greencoat UK Wind raising cash to buy Scottish wind farms
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