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Renewable Energy Generation sells business due to policy changes

Renewable Energy Generation has announced it will be selling its business to BlackRock, which has valued the company’s equity before exit costs, at £64.5m.

On 18 June 2015, the newly elected UK Government announced the start of a process of dismantling green incentives.

The proposed policy changes include the closure of the Renewables Obligation (RO) to onshore wind and ground-mounted solar projects, continued reductions to the small scale wind feed-in tariff (FIT), elimination of onshore wind from feed-in tariff contracts for difference (CFD FIT), stricter planning policies with respect to onshore wind farms and elimination of the climate change levy (CCL) exemption for renewable generators.

The company said: “Any one of these factors alone would have a significant impact on the Group but, taken together, the impact is profound.”

Since the General Election, the Board has been assessing the impact of these policy changes on the Group’s future.

During this process, the Board received a non-binding offer for its trading subsidiaries, representing the business, assets and undertakings of the Company.

The offer was announced by the board on 9 October 2015 and has now been accepted, subject only to shareholder approval.

Under the deal, the company will sell its operating and consented wind and solar project assets to the BlackRock fund.

These include 34.7 MW of operational wind farms, a 2.64-MWp solar project and 34.8 MW of onshore wind projects in procurement or construction.

The remaining business will be sold to a new company owned by Manco EBT, established for the benefit of REG’s executive directors and members of senior management.

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