The Renewables Infrastructure Group is selling a 15.2% equity interest in the 330MW Gode offshore wind farm in Germany for €100m. The buyers are funds managed by Equitix Investment Management Ltd. The price is a 9% premium to carrying value. The company is retaining a 9% stake in the project.

That will bring funds freed up under the company’s disposal programme and through the management of the portfolio to £210m in 12 months, with the disposals completed at an 11% premium on average.

Drawings on the company’s revolving credit facility (RCF) at 30 June 2024 were £334m. Proceeds from the sales of Pallas onshore wind farm (announced on 12 March 2024) and the 15.2% equity interest in Gode are expected to be received in H2 2024 and would reduce this to about £195m.

The board says that, given the significant progress made in respect of TRIG’s capital allocation priorities and the attractive investment opportunity presented by TRIG’s shares trading at a significant discount to NAV, it has allocated up to £50m to a 12-month share buyback programme that will commence following the release of the 2024 interim results.

Based on current cash flow projections, divestments agreed to date, and assuming that about £25m of the buyback programme is completed in 2024, RCF drawings would reduce from £364m at 31 December 2023 to c.£220m at 31 December 2024. The investment manager is progressing additional disposals as well as portfolio-level financing opportunities to enable the reduction of RCF drawings further, and to create greater capacity for future investment activities.

[This is clear evidence that 1) the company’s NAV is fairly valued – if anything a little conservative, and 2) for want of investors, money is flowing out of good quality renewable energy companies at a time when it is much needed. The situation needs fixing urgently.]

TRIG : Renewables Infrastructure Group sells stake in offshore wind farm to fund share buyback