Alternative Investment Market-quoted Renewable Energy Holdings (REH) has gained shareholder approval for the sale of its German wind interests to Allianz Renewable Energy Management for €39.8 million. The deal will give the firm the cash it needs to move forward with its other wind power projects.
The selling price includes €2 million which is deferred and will be in the form of performance bonds for two years following the completion of the deal. The cash covers warranty claims and energy losses relating to any crackdown on noise levels at the sites.
Wind speeds at the German wind power sites have not been as high as originally expected, causing the debt-finance acquisition to be less attractive so that it made sense to sell the assets. The operations lost £840,000 on revenues of £4.5 million in 2009.
REH will use €30.4 million of the proceeds to pay off debt. Most of the remainder will be invested in the Kobylany wind farm project in Poland. REH is in discussions with banks about financing this project.
The company’s main focus, in addition to the Kobylany project, will be the Mynnydd y Gwynt wind power project in Wales. REH has sold its Welsh landfill gas operation for up to £2.8 million, while it has swapped its CETO wave power technology for 232.6 million shares in Carnegie Wave Energy, equivalent to 29.1% of the Australian Securities Exchange-listed company.
A commercial scale CETO deployment is on target to be completed by the end of 2010 at a site to the west of Garden Island, off Perth in Western Australia. In addition a licence has been awarded to Carnegie which will enable it to site a wave energy project south of Sydney, New South Wales.
Market: AIM
Symbol: REH
Price: 15.25p
12 month high/low: 32.25p/7.75p
Market cap: £10.6m
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