Good Energy Group sells renewable generation portfolio for £24.5mn

Good Energy Group sells renewable generation portfolio for £24.5mn

LONDON, UK: Good Energy Group announced the disposal of its 47.5MW renewable generation asset portfolio as part of an ongoing strategic shift to energy and mobility services.

Company had appointed KPMG LLP to lead a sale process for the Company’s entire 47.5MW generation portfolio. Following a competitive process, the disposal of the portfolio has been completed with Bluefield Solar Income Fund (“BSIF”) who are advised by Bluefield Partners LLP.

The disposal is for a total consideration of up to £24.5 million. This consists of initial and deferred consideration elements:

  • Initial consideration of £16.4m, less distribution since the lockbox date of £0.7m. Cash proceeds of £15.7m were received on completion.
  • Deferred consideration of up to £8.1m, will largely be calculated with reference to an agreed financial model and based on the actual operational, technical, real estate and financial position of the projects. It is anticipated that this process will be substantially completed, and payments made by the end of February 2022.
  • The transaction is at a premium to net book value. As of 30 June 2021, the portfolio was held on the balance sheet at a net book value of £17.7m, with gross assets of £56.8m and debt outstanding of £39.1m. The portfolio recorded pre-tax profits of £0.2m in the six months ended 30 June 2021.

Good Energy Group is now substantially debt free with a strong cash position, strengthening the Company’s balance sheet.

The 47.5MW generation portfolio provides around 15% of Good Energy customers’ electricity and will continue to do so via existing power purchase agreements.

Bluefield previously acquired the Good Energy developed West Raynham Solar Farm in 2015.

The Company was advised by KPMG LLP as financial advisor regarding the Disposal. Norton Rose Fulbright are its retained legal advisors.

Proceeds from the transaction will be used to accelerate and support further investments across both transport and decentralised energy to deliver Good Energy’s strategic plan. These investments will not occur all at once and in the meantime, proceeds have further strengthened the Company’s balance sheet.

The Company intends to participate in the current funding round being undertaken by its subsidiary Zap-Map. This will allow Zap-Map to embark on its next course of commercial and development goals, which will crystallise its leading position for its market services in the UK and initiate steps of international expansion to selected territories.

The Company is currently building a new platform for its decentralised energy service business, to enhance existing products and propositions and deliver new services for feed in tariff customers. This platform will enable smart export for solar customers, and the ability to pay actual as opposed to deemed rates, providing material benefits to the business and customers.

Good Energy is a supplier of 100% renewable power and an innovator in energy services. It has long term Power Purchase Agreements with a community of 1,900 independent UK generators which underpin its commitment to supplying renewable power and Uswitch Green Tariff Gold Standard and Which? Eco Provider accreditations.

The generation portfolio supplied approximately 15% of Good Energy’s total customer demand. The Company will maintain existing PPA arrangements with the sites after the Disposal and continue to expand relationships with more UK generators.

Nigel Pocklington, Chief Executive Officer of Good Energy, said: “The sale of our generation portfolio at a premium to book value is a transformational moment for Good Energy and a fantastic deal for all of our stakeholders. We are using the capital from our past, to invest in our future.

“Last year, we outlined our clear strategic direction to capitalise on a rapidly growing market in decentralised, digitised clean energy and transport services, based on 100% ‘real’ renewable power.

“We are ideally positioned to benefit from this trend through our investment in Zap-Map, the UK’s leading EV app, and our growing stable of other energy products and services.

“We expect to make further investments across both transport and decentralised energy to deliver our strategic plan, which we believe has massive headroom for growth.

“Alongside these investments into mobility and energy services, this transaction reduces debt and further strengthens our balance sheet, which is particularly important given the current volatility in the energy market.”

Neil Wood, Bluefield Partners LLP, said: “Bluefield’s success in this process is a mark of our commitment to the UK renewables sector and drive to find high quality, highly regulated assets for our shareholders. They are a great fit for our existing operational portfolio.”

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