Atlantis hails sale of Uskmouth stake
● Company nets £32.9m in cash plus contribution to conversion costs
Sustainable energy specialist SIMEC Atlantis Energy has agreed to sell a stake in its “flagship” Uskmouth Conversion Project in Wales, deeming it a “huge milestone” for the venture.
Atlantis, which has offices in Edinburgh’s Fountainbridge and is behind the pioneering Meygen project in the Pentland Firth, is offloading a 25 per cent shareholding in the 220-megawatt project to UK infrastructure fund manager Equitix.
The deal is for £32.9 million in cash, and implies an equity value of £131.5m for Atlantis’ current 100 per cent shareholding in Uskmouth Power. It is expected to close in the first half of next year.
Equitix will also, subject to relevant conditions being met, contribute 25 per cent of the remaining budgeted development costs to achieve financial close of the third-party debt financing envisaged for the conversion costs of Uskmouth Power and then 25 per cent of the conversion costs that will be funded by shareholders.
Atlantis rebranded after its deal announced in 2017
0 Tim Cornelius calls the deal a ‘huge milestone’ for Uskmouth Power
EQUITIX
to acquire the power station in south Wales from SIMEC Energy, a subsidiary of Sanjeev Gupta’s GFG Alliance, in a reverse takeover.
The existing Uskmouth coalfired power plant will be converted to generate electricity from 100 per cent wastederived energy pellets.
The latest transaction also comes after the two firms in 2016 struck a partnership deal to accelerate development in Scotland.
London-based Equitix is a major investor and developer in the UK and European infrastructure markets. As a long-term investor, its 25-year funds invest in infrastructure assets across a range of sectors including energy from waste, renewables (offshore transmission, offshore and onshore wind, waste processing and solar-power), highways, street lighting and social infrastructure.
It has “excellent relationships with the potential funders being considered for the project to supplement and further strengthen those of Atlantis,” the latter firm said.
Atlantis chief executive Tim Cornelius said: “Equitix is one of the most sophisticated and experienced investors in the waste-to-energy sector in the UK. This is a huge milestone for Uskmouth Power, which will ensure the UK is ready for a future focused on reduced coal and increased renewable energy generation.”
Hugh Crossley, chief investment officer of Equitix, also commented: “As a business, we are as committed as SIMEC Atlantis Energy, the majority owner and operator, to using Uskmouth Power as a blueprint for further conversion of similar plants worldwide to help address the key challenge of how we can treat waste material in an environmentally-responsible manner and use it to generate low carbon energy.”
Cantor Fitzgerald Europe analyst Adam Forsyth noted that Atlantis has inked a deal that values the Uskmouth project at almost two and a half times the company’s current market cap, and “provides a strong point of external validation for the project from an experienced player and improves confidence in the likelihood of project finance fully funding the remaining conversion costs — taken as a whole, this represents a major derisking for the project.”
“We are as committed as Simec Atlantis Energy to using Uskmouth Power as a blueprint for further conversion of similar plants worldwide”