(Alliance News) - Cindrigo Holdings Ltd on Tuesday said it signed an agreement to acquire Kaipolan Energia OY, to boost its presence in the renewable energy sector.
Cindrigo is a Guernsey-based renewable energy company, while Kaipolan Energy holds a 50-year lease of a 110 megawatt waste-to-energy combined heat and power plant located in Kaipola, Finland.
Cindrigo will acquire Kaipolan Energy from seller Amtroy OU for EUR19.0 million, materially on the same terms as the memorandum of understanding announced in late February.
Around EUR15 million will be paid in Cindrigo shares, plus EUR100,000 in cash to be paid 45 days after completion and a deferred payment of EUR3.9 million in cash, payable upon the earlier of commencement of commercial operations, or 12 months after completion.
There is also a potential earnout of up to EUR3 million, Cindrigo said, subject to meeting earnings before interest, tax, depreciation and amortisation performance targets within the initial three years after commercial operations commence.
It said funding of EUR1.5 million in the form of a loan has been provided to Cindrigo by Danir AB, Cindrigo's largest shareholder, to facilitate the initial phases of the project. In return, Danir will get a 10% stake in Kaipolan Energy.
This will prepare the plant for commercial operations in the fourth quarter 2024, Cindrigo said. It will need to raise a further EUR5 million to cover the full upgrade of the plant and fund the deferred consideration payment.
Completion of the acquisition is planned to be on or before Monday next week.
"This acquisition marks a significant milestone for Cindrigo as we strengthen our presence in the renewable energy sector. The Kaipola facility represents a valuable asset and significant addition to our portfolio. It also underscores and enhances our capacity to deliver sustainable energy solutions to drive positive change," said Chief Executive Officer Lars Guldstrand.
"The Kapiola facility will also be an excellent financial addition to the company, with early income generation expected this year. This transaction aligns with Cindrigo's long stated aim to develop a significant presence in the renewable energy sector through both geothermal and waste to energy projects and supports green domestic energy resources and production."
Shares in Cindrigo are currently suspended.
By Greg Rosenvinge, Alliance News senior reporter
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Cindrigo Hldgs (CINH)