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(Alliance News) - SIMEC Atlantis Energy Ltd on Thursday agreed to acquire a Scottish renewable energy project maintenance company for a nominal sum and said that it will send turbine equipment to Japan for a demonstration project.
The tidal power project developer also said that it has contracted Mitsubishi Hitachi Power Systems Europe GmbH to design and develop a combustion system for the company's Uskmouth power station conversion project located in Newport, Wales.
Mitsubishi Hitachi Power Systems Europe is a unit of Mitsubishi Hitachi Power Systems Ltd, a joint venture company between Mitsubishi Heavy Industries Ltd and Hitachi Ltd.
Shares in SIMEC Atlantis were up 15% at 11.67 pence each in London on Thursday morning.
SIMEC Atlantis has bought the Green Highland Renewables project development, asset management, operation and maintenance business from shareholder SIMEC Energy for a nominal cash sum of GBP1. The company originally intended to buy Green Highland in full, including its power assets.
"This restructured transaction is the right outcome for Atlantis. It provides us with more near-term cash to deploy on our flagship Uskmouth and MeyGen projects which will deliver the largest possible returns for investors," SIMEC Atlantis Chief Executive Tim Cornelius said.
The Green Highland business, which provides operation and maintenance services for more than 45 hydro schemes in the UK, is expected to deliver immediate, positive cash flow to SIMEC Atlantis via its maintenance contracts on hydro assets. Revenue from long-term contracts is expected to be around GBP4 million annually
SIMEC Atlantis separately said that it has singed a contract to supply tidal generation equipment and offshore construction services to Japan's Kyuden Mirai Energy for a demonstration project.
Under the agreement, SIMEC Atlantis will supply and install its AR-Series turbine and associated balance of plant. The project, located in the straits of Naru Island within the southern Japanese Goto island chain, has a total budget of JPY1.80 billion, around GBP12.8 million.
The company said that the Mitsubishi Hitachi contract includes milling and combustion tests on the fuel pellets and completion of Uskmouth furnace burner system design.
By Tapan Panchal; tapanpanchal@alliancenews.com
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