20th Jan 2022 09:02
(Alliance News) - ContourGlobal PLC on Thursday said it has agreed to sell its hydro-electric generation business in Brazil to Patria Investments for BRL1.73 billion, about USD313 million.
The price tag includes the assumption of debt, so the net proceeds to ContourGlobal will be USD110 million. The company said it will decide whether to return the cash to shareholders or reinvest it once the deal closes, which is expected in the second quarter.
ContourGlobal also has granted Patria an exclusive right to buy its wind assets, with these expected to be sold in the first half of the year.
"This sale is consistent with our drive to unlock value from undervalued assets in our portfolio and deliver further attractive risk adjusted returns for our shareholders, and demonstrates that value differential for our assets in the public and private markets," said Chief Executive Officer Joseph Brandt.
The hydro assets consist of nine run-of-river hydro-electric generating businesses operating under long-term contracts with 168 megawatts of gross capacity. They had a gross asset value of USD105.4 million as of September 30.
The hydro assets generated USD11.0 million in pretax profit in the 12 months that ended September 30 - 16% of ContourGlobal's total pretax profit - on USD50.1 million in revenue.
ContourGlobal shares were up 0.2% at 187.20 pence early Thursday. The FTSE 250 company has a market capitalisation of about GBP1.2 billion.
By Tom Waite; [email protected]
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