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LONDON (Alliance News) - SSE PLC on Friday said it agreed to sell a 49.9% stake in its Stronelairg and Dunmaglass wind farms to Greencoat UK Wind PLC and its partner, an undisclosed UK pension fund, whose investment is managed by Greencoat Capital.
In addition, Greencoat UK Wind, which invests in UK wind farms, said it will raise up to GBP131 million through a 103.0 million share placing at a price of 127 pence each. Proceeds from this placing will be used to repay or reduce future draw downs under the company's revolving credit facility, it said.
Greencoat UK Wind shares were trading 1.5% lower early on Friday at 131.79p each, while SSE shares were up 0.5% at 1,176.00p each.
Greencoat UK Wind will acquire a net 35.5% stake in the wind farms for GBP452 million, while the managed account will acquire a net 14.4% for GBP183 million. Meanwhile, SSE will continue to hold the remaining 50.1% and operate the assets.
The transaction is expected to complete by the end of March .
Stronelairg wind farm is located near Fort Augustus, Scotland, and has an installed generating capacity of 228 megawatts. The 66 turbine wind farm was commissioned in December 2018 and has a load factor of 43%.
Meanwhile, Dunmaglass is located 15 miles south of Inverness, also in Scotland, and has an installed generating capacity of 94 megawatts. The 33 turbine wind farm was commissioned in December 2017 and has a load factor of 44%.
FTSE 100-listed energy firm SSE said it intends to use GBP200 million of the sale proceeds to fund the discretionary share buyback that it announced in mid-July, while the remaining proceeds will be used to reduce debt. The company expects to begin the buyback before the transaction completes, it said.
Greencoat UK Wind said it expects to have GBP794 million of outstanding debt upon completion of the acquisition.
"This transaction builds on our longstanding relationship with SSE and we are delighted to be co-investing with a major UK pension fund partner," said Greencoat UK Wind Chair Tim Ingram.
"The sale of stakes in these wind farms to Greencoat is a continuation of SSE's longstanding approach of partnering and securing value for shareholders at appropriate times," added SSE Finance Director Gregor Alexander.
