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Greencoat UK Wind to acquire 35.5% stake in Stronelairg and Dunmaglass wind farms from SSE

The renewable energy investor said it would acquire a 49.9% stake in each of the wind farms in partnership with a major UK pension fund
Wind farm
Greencoat itself will acquire a net 35.5% stake in the two wind farms for £452mln

Greencoat UK Wind PLC (LON:UKW) has agreed to acquire a stake in the Stronelairg and Dunmaglass wind farms from FTSE 100 utilities firm SSE plc (LON:SSE).

The FTSE 250 renewable energy investor said it would acquire a 49.9% stake in each of the wind farms in partnership with a major UK pension fund whose investment is managed by Greencoat Capital, a private equity firm.

READ: Greencoat UK Wind higher as it reports rise in fourth quarter net asset value, hike in 2019 target dividend

Greencoat would obtain a net 35.5% stake in the two wind farms for £452mln, while the managed fund would acquire a net 14.4% stake for £183mln.

The two wind farms, both located in Scotland, will continue to be operated by SSE after the acquisition, with Stronelairg and Dunmaglass carrying generation capacity of 228 megawatts (MW) and 94MW respectively as well as load factors of 43% and 44%.

The acquisitions are expected to complete by 29 March 2019, after which the firm said it expected to have £794mln of outstanding debt.

Greencoat also announced a placing to raise up to £131mln by way of a non-pre-emptive issuance to institutional investors at 127p per share, a 5% discount to its last close price, that would be used to repay or reduce drawdowns on its revolving credit facility.

The placing is subject to shareholder approval at a general meeting due on 25 February.

Tim Ingram, chairman of Greencoat, said the “two high load factor, [Renewable Obligation Certificate] accredited wind farms” would deliver “attractive investment returns” and built on the firm's relationship with SSE.

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