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(Alliance News) - Scirocco Energy PLC on Thursday said it has agreed to sell Energy Acquisitions Group Ltd for an enterprise value of GBP2.6 million to private equity firm OrbeNovo Capital.
Scirocco Energy is an investing company focused on opportunities in the energy transition market. Shares in the company, which has a market capitalisation of GBP2.2 million, were down 10% at 0.25 pence each in London on Thursday around noon.
Scirocco has agreed to sell EAG to ONC Bidco 1 Ltd, a newly incorporated company controlled by OrbeNovo Sponsor LLP and an affiliate of OrbeNovo Advisory LLP, for a firm net price of GBP702,267. Up to a GBP150,000 further is payable in tranches contingent on EAG completing the acquisition of specified target anaerobic digestion sites.
The firm net price implies an enterprise value of GBP2.6 million, including outstanding debt owed to lender AIB of around GBP1.8 million.
The initial proceeds are expected to be received in early 2024, following Scirocco shareholder approval at a general meeting and receipt of the change of control consent from AIB.
"I am pleased to announce a strategic decision regarding the proposed divestment of our interests in EAG. This move is grounded in a thorough evaluation of key factors influencing the growth and development of our investments," said Chief Executive Officer Tom Reynolds.
"The combination of the challenges of retaining EAG without predictable access to capital, and considering the decline in Greenan's remaining life, the board is convinced that the opportunity to sell now on the terms described here provides the optimal window for divestment. While the consideration payable to the company falls short of the total investment made into EAG, it's important to underscore that the valuation of EAG mirrors the fair market value of the business in its current form."
By Holly Beveridge, Alliance News reporter
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