Greencoat UK Wind PLC (the “Company”, or “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 managed by Greencoat Capital. UKW will acquire a net 35.5% stake in the wind farms for a consideration of £452m (including cash and working capital), while the managed account will acquire a net 14.4% for £183m. 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.
The Company also announces that it is seeking to raise up to £131 million through a placing (the “Placing”) of new ordinary shares in the capital of the Company (the “Placing Shares”) by way of a non-pre-emptive issuance to institutional investors at 127p per share, pursuant to the terms and conditions set out in the Appendix to this announcement. Proceeds from the Placing will be used to repay or reduce future draw downs under the Company’s revolving credit facility (increased to £525m).
Following the completion of the acquisitions, the target date of which is 29 March 2019, and assuming that the maximum amount has been raised under the Placing, the Company expects to have £794m of outstanding debt (of which £400m is long term debt), which would be equal to 34% of Gross Asset Value (“GAV”).
Jim Smith, Managing Director Designate, 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.”
Jefferies International Limited and RBC Capital Markets acted as financial advisers to the Company and the Greencoat Capital managed account.