(Alliance News) - Mercia Asset Management PLC announced on Wednesday it has sold its stake in Faradion Ltd to Reliance New Energy Solar Ltd for a total enterprise value of GBP100.0 million.
The Warwickshire-based asset manager held a 16% stake in Faradion and has received initial cash proceeds of GBP18.6million and a further GBP800,000 ring-fenced for three months.
The sale has generated an initial 4.2x return on Mercia's direct investment of GBP4.4million and a profit of GBP5.7 million above Mercia's GBP12.9 million direct investment in Faradion at September 30, the company explained.
The sale has also generated combined initial unrestricted cash returns of GBP30.4 million on a total investment cost of GBP3.6million for Mercia's managed funds, Mercia added.
Mercia made its first direct investment in Faradion in January 2017 and Mercia's managed funds have held equity stakes in Faradion since 2010.
Faradion is a Sheffield-based sodium-ion battery technology firm that provides energy storage. Reliance New Energy is a wholly owned subsidiary of Mumbai-based Reliance Industries Ltd, a conglomerate including energy, retail and telecommunications businesses.
Shares in Mercia were up 5.0% at 39.90 pence on Wednesday in London.
By Heather Rydings; heatherrydings@alliancenews.com
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Mercia Asset (MERC)