Foresight Solar has sold a 50% stake in its Lorca portfolio in Spain to a specialist Luxembourg-based fund advised by EB-Sustainable Investment Management (EB-SIM), a subsidiary of Evangelische Bank for €26.9m. That price represents a 21% premium to their third quarter holding value and an exit IRR of 12.1% on funds invested to date in the stake sold.
The proceeds will all be used to pay down the company’s variable rate revolving credit facility further, lowering gearing and reducing interest expense. Plans to sell a further 200MW of assets are progressing. The manager says that conversations are underway and the process will continue into 2024.
Lorca is a 99MW subsidy-free portfolio that includes three assets: Las Salinas (30MW), Los Llanos (49MW) and Los Picos (20MW). Purchased at the ready-to-build stage three years ago, Foresight Solar took the projects through construction, realising a 2 pence per share NAV uplift when they became operational in 2022.
The portfolio has a 10-year fixed price power purchase agreement (PPA) with Statkraft, one of Europe’s largest renewable energy providers. Signed in 2021, the PPA provides long-term revenue visibility for approximately 70% of the assets’ annual production and contributes to dividend cover. In the nine months to September 2023, the sites generated 138GWh of electricity.
Alexander Ohlsson, the chair of Foresight Solar, said: “We are now selling a stake at a premium to crystallise value and recycle capital into other options while maintaining exposure to an asset that will continue to deliver long-term revenues and contribute to dividend cover.”
FSFL : Foresight Solar sells stake in Spanish portfolio