(Alliance News) - Greencoat UK Wind PLC on Monday said that, alongside other funds, it agreed to buy a 25% stake in the London Array offshore wind farm from Orsted AS for around GBP717 million.
Greencoat UK Wind is a London-based renewable infrastructure fund, focused on UK wind farms and agreed to buy the stake with other funds managed by Schroders Greencoat LLP.
The investment is expected to complete on Monday next week, with Greencoat UK Wind's total investment expected to be GBP444 million. This includes GBP394 million of equity investment, or 14% net stake, and a GBP50 million loan investment.
"The transaction was originated and negotiated on a bilateral basis and reflects the company's ability to continue to generate significant shareholder value through selective off-market investments," said Greencoat UK Wind Chair Lucinda Riches.
London Array was commissioned in May 2013 and has a total capacity of 630 megawatts, Greencoat UK Wind said, comprising 175 Siemens AG 3.6MW turbines. Other owners are RWE AG at 30%, pension fund Caisse de depot et placement du Quebec at 25% and the Abu Dhabi Future Energy Co, otherwise known as Masdar at 20%.
Greencoat UK Wind said the wind farm is operated by RWE and earns two renewables obligations certificates per megawatt hour. It is located off the Kent coast in the outer Thames Estuary.
At the end of June, Greencoat UK Wind utilised GBP640 million of new term loan commitments from new and existing lenders. This was just before pre-paying GBP150 million of term loans maturing in November and December, together with GBP200 million drawn under its revolving credit facility.
Cash balances at June 30 were GBP499 million with zero drawn under the revolving credit facility.
Greencoat UK Wind will release its half-year results on Thursday.
Shares in Greencoat UK Wind were up 1.7% to 147.80 pence each in London on Monday morning.
By Greg Rosenvinge, Alliance News reporter
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Greencoat UK Wind (UKW)