Terra Firma, the private equity firm headed by Guy Hands, is considering the sale of its 68.6 per cent interest in Infinis Energy, the renewables specialist that it floated last year.
The holding is worth about £450 million and, although Terra Firma stressed there that was no certainty a deal would be done, it said there was “merit to exploring potential interest in the stake as a whole alongside other options, including the potential for market sell downs”.
Infinis Energy, chaired by former SSE boss Ian Marchant, employs about 20 people at its Edinburgh office and operates 147 sites across the UK, including seven onshore wind farms in Scotland.
The company, which also has an office in Northampton, floated on the London Stock Exchange in November last year. Shares in the firm ended yesterday’s session up 2.5p at 222p – well below the initial public offering (IPO) price of 260p.
In response to Terra Firma’s statement that it was mulling the sale of its remaining stake, Marchant said: “Since our IPO, Infinis has made good progress on its organic growth plans and has delivered on its commitments to investors, providing a combination of stable dividend income and earnings growth. We believe that Infinis continues to offer a compelling investment story.”
Last month, the renewable energy firm posted a pre-tax profit of £2m for the six months to 30 September, down from £2.4m a year earlier, as revenues were hit by below-average wind speeds. However, the company paid out a maiden interim dividend of 6.1p a share and said investors were on course to share a payout of £55m for the full year.
If Terra Firma – which also owns the Odeon cinema chain – sold its 68.6 per cent Infinis stake to a single buyer or multiple parties acting together, that would trigger a mandatory offer for the remaining shares unless the City’s Takeover Panel ruled otherwise.
Earlier this month, Hands attacked the UK government’s “bias” against onshore wind projects, accusing it of being “spooked” by those who are vocally opposed to seeing more turbines cropping up on the landscape.
“The cost of electricity generated by onshore wind has been falling fast and is now close to parity with gas,” he said.
“The government itself has confirmed that onshore wind generation will be the cheapest form of new-build electricity within a few years. A study for the European Commission found that it is already far cheaper than gas, and half the cost of coal generation, when environmental and health factors are considered.
“Spooked by opposition from a loud minority who don’t like wind turbines, the Conservatives have made clear that, if they are in power after the next election, they will slam the brakes on expansion.”
He added: “Instead, the government is putting its faith – and public money – in expanding offshore wind and the potential of shale gas. It is a decision which owes more to prejudice and wishful thinking than a sensible energy policy.”
Along with onshore wind projects, Infinis runs ten small-scale hydroelectric facilities and is the UK’s largest producer of electricity from gas produced by landfill sites, with a market share of about 40 per cent.
The firm recently secured a £52m funding package from Royal Bank of Scotland and National Australia Bank to build its 43 megawatt (MW) A’Chruach wind farm in Argyll, plans for which had been put on hold in the run-up to the independence referendum. It is also pressing ahead with its 55MW Galawhistle project near Douglas in South Lanarkshire.
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