Bluefield Solar buys wind portfolio – Bluefield Solar has entered into a conditional sale and purchase agreement to acquire a portfolio of 109 small scale onshore wind turbines located across the UK for an aggregate consideration of approximately £60m (including working capital) from Arena Capital Partners Limited. The deal is conditional upon Bluefield securing the necessary financing to complete the acquisition.
The 109 UK onshore wind turbines are distributed as follows: England (62), Northern Ireland (29), Scotland (11) and Wales (7).
The portfolio has no associated debt. The deal is expected to help the company meet its dividend target. In addition, the acquisition has been structured to provide the opportunity to re-power 17 of the Northern Irish wind turbines in portfolio. This requires the company to secure the necessary planning, regulatory and construction consents. These have already been received in respect of five of the wind turbines. In the event that all 17 turbines were to be re-powered, the generation capacity of the portfolio is expected to increase by approximately 40%. Re-powering all 17 turbines would cost about £35m. As such, the total potential investment in the wind portfolio could increase to approximately £95m.
Over 90% subsidy income
The projects within England, Scotland and Wales are all FIT accredited, whilst those in Northern Ireland have been accredited under its Renewable Obligation Scheme with a tariff of four Renewable Obligation Certificates (ROC)s. The projects benefit from subsidies for 20 years from accreditation and so last until 2034-2037. As a result of these accreditations, total revenue from the wind portfolio is over 90%. The remaining under 10% of income, is derived from power sales, sold under 15-year power purchase agreements with Power NI that have optionality of either receiving a floating or fixed price for power.
|
Manufacturer |
Output (kW) |
Number of Turbines |
Total output (kW) |
|
WTN |
250 |
14 |
3,500 |
|
Vestas |
225 |
6 |
1,350 |
|
Endurance |
225 |
16 |
3,600 |
|
Endurance |
180 |
1 |
180 |
|
Endurance |
55 |
72 |
3,960 |
|
Total |
109 |
12,590 |
Financing arrangements
Bluefield’s revolving credit facility is currently £90m drawn versus a £100m maximum (the £45m fund raise in November 2020 was offset by the Bradenstoke solar acquisition in January 2021). Bluefield will seek to issue up to 84.7m new ordinary shares at 118p to raise gross proceeds of up to approximately £100m. In the first instance, approximately 81.4m shares will be reserved for existing shareholders under an open offer, under which those shareholders will be entitled to subscribe for one new share for every five shares that they already hold. The balance of the new shares available will be allocated to an initial placing, offer for subscription and/or an excess application facility.
If demand supports it, the issue size can be increased subject to a maximum of £150m.
The 118p price represents a premium of approximately 8.1% to the last published NAV (as at 31 March 2021, less the payment of the second interim dividend of 2.0p paid to shareholders on the register as at 14 May 2021, and the expected third interim dividend of 2.0p) and a discount of approximately 3.3% to the closing share price on 25 June 2021.
The new shares will not be entitled to the third quarterly interim dividend of 2p
The full year dividend target is still 8.0p for the financial year ending 30 June 2021 (2020: 7.90 pence). This is expected to be covered by earnings and is post debt amortisation.
BSIF : Bluefield Solar buys wind portfolio