Octopus Renewables Infrastructure Trust (ORIT) says Kansai Electric Power Company of Japan is buying an 80% stake in the offshore wind development arm of portfolio company Simply Blue Holdings. The transaction is in line with the latest holding value of Simply Blue, which ORIT wrote down by 25% in August.
Proceeds will be used in part to repay ORIT’s loan to the company with the “residual value” retained through its ongoing minority interest in the company.
ORIT first invested in the renewable energy developer in August 2021 when it took a 12% stake. Over a year later it invested an additional €6.25m (c.£5.5 million) alongside other Octopus Energy Generation funds to take it to 19% and the group’s stake to around 38%.
In August it wrote down its investment by £5.7m to £15.1m. At the time it said this reflected sector-wide challenges affecting the floating offshore wind industry and the anticipated outcome of discussions with potential long-term funding partners for its offshore wind portfolio.
The subsequent transaction with Kansai, a ¥2.7tn (£13.2bn) utility, follows the carve-out of Simply Blue’s sustainable fuels business into Nova Scotia Fuels earlier this year in which ORIT retains a 22.5% stake.
The £322m fund, whose shares stand 39% below net asset value and offer a 10% dividend yield, said it was the next step in realising value from Simply Blue.
Fund manager Chris Gaydon said: “This is a solid outcome in what remains a challenging market for offshore wind developers.”
Stifel analyst Will Crighton said: “We think this announcement could be clearer as it is not clear what the proceeds actually will be, or what the ‘residual value retained’ is.”
This is the second developer sold by ORIT this week. On Monday it transferred its stake in HYRO Energy Limited, a UK-based green hydrogen and e-fuels development platform, to Octopus Energy Transition Fund for £4.6m, also in line with the latest valuation.
