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SIMEC Atlantis to sell 25% stake in Uskmouth project

Equitix is a major investor and developer in the UK and European infrastructure markets with more than £3.0bn of funds under management across its five core funds and managed accounts
Uskmouth power plant
The Uskmouth power plant is to be converted to use an end-of-waste energy pellet as fuel

SIMEC Atlantis Energy Limited (LON:SAE) has agreed in principle to sell a 25% shareholding in the Uskmouth power plant conversion project for £32.9mln.

The renewable energy firm said leading UK infrastructure fund manager, Equitix, is buying the stake, subject to due diligence, on terms that imply an equity value of £131.5mln for the power plant, which is located in Newport, Wales, SIMEC Atlantis, which has a market capitalisation is around £53mln, currently owns 100% of the Uskmouth project.

READ: SIMEC Atlantis awards FEED contract for Uskmouth conversion project

Assuming the deal goes ahead, the fund manager has agreed to contribute 25% of the remaining budgeted development costs to achieve financial close of the third party debt financing envisaged for the conversion costs of Uskmouth Power.

Thereafter, 25% of the conversion costs that will be funded by shareholders.

Tim Cornelius, the chief executive of SIMEC Atlantis, said Equitix would bring expertise in financing, engineering, procurement and construction (EPC), waste contracting and off-take negotiation to the project.

“We are obviously delighted to welcome Equitix into this project as a co-funder, but it is also their personnel, investment track record and credibility in the infrastructure markets globally that has our team so excited. 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," Cornelius said.

High Crossley, the chief investment officer of Equitix, said the transaction represents a great opportunity for Equitix to invest in a sector in the UK that fits well with the fund’s core infrastructure strategy.

“We are committed to investing for the long-term in projects like Uskmouth Power which we expect will help us to continue to offer our investors predictable yields through stable, long-term cash flows underpinned by its robust contractual structure,” Crossley said.

“Uskmouth Power is the latest addition to Equitix's significant capabilities in the renewable energy sector. Equitix has built its expertise through bidding, developing and managing renewable energy projects,” he added.

“As a business, we are as committed as SIMEC Atlantis Energy Limited, 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," Crossley concluded.


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