Greencoat Renewables makes €156m disposal and plans dual listing
Greencoat Renewables (GRP ) has announced the sale of six of its Irish onshore wind assets for €156m (£118m). This takes total proceeds from disposals up to €200m since December.
The £829m Schroders-run trust, managed by Bertrand Gautier and Paul O’Donnell, is also in advanced negotiations over the sale of a significant minority stake in its 50MW Andella wind farm in Spain. The fund invests in renewable infrastructure assets across Ireland and a spread of eurozone countries.
Norwegian private equity firm HitecVision is set to purchase six Irish onshore assets, with the deal expected to close in June. Proceeds will be used to repay the trust’s revolving credit facility (RCF) and reduce gearing to around 51%, which would be a 3% reduction from the end of the first quarter.
This transaction follows the disposal of the Kokkoneva wind farm in Finland, announced last November.
Manager O’Donnell said the sales reflect ‘the disciplined execution’ of the trust’s capital allocation strategy, which has focused on increasing liquidity over the last six months.
Peel Hunt analyst Anthony Leatham said the sales ‘should help to provide future balance sheet flexibility and scope for further value creation from older assets through recontracting power purchase agreements’, as well as ‘providing options for hybridisation and repowering’.
With a smaller portfolio, the trust will have more scope to focus on signing deals like they did with Singpore-based real estate company Keppel earlier this month. The 10-year power purchase agreement was for 100% of the electricity generated from the trust’s Ballincollig wind farm in Cork and works on a ‘pay as produced’ basis which, according to O’Donnell, means the trust will enjoy ‘escalating revenues’ from the asset ‘through to 2036.’
As of yesterday, Greencoat traded at a 28% discount, which the board have sought to tackle through an active buyback scheme, purchasing 27.7 million shares for €25 million over 2024.
Greencoat Renewables also announced that it is looking to take advantage of greater demand for renewables in South Africa and is in the process of applying for a secondary inward listing on the Alternative Exchange of the Johannesburg Stock Exchange (JSE).
Chair Ronan Murphy said this decision had been taken in response to a number of South African institutional investors who have expressed an interest in investing. It is expected to enhance liquidity for shareholders, diversify the company’s shareholder base and position Greencoat for growth, by providing access to a new and deep capital market.
Greencoat Renewables currently yields close to 9%. Over the past three years, its shares are down 18.2% which compares to a 25% loss by the average trust in the AIC’s renewable energy sector.
