15th Aug 2024 11:00
(Alliance News) - JLEN Environmental Assets Group Ltd on Thursday announced the disposal of a majority stake in a group of anaerobic digestion facilities in the east of England to fund a share buyback programme.
The Guernsey-registered company is an environmental infrastructure investment fund with a portfolio of 42 assets located across the UK and Europe.
JLEN Environmental signed an agreement to sell a 51% stake in its portfolio of six gas-to-grid anaerobic digestion facilities to Future Biogas Ltd, for GBP68.1 million, which it said was in line with its valuation on the JLEN books.
Future Biogas is a specialist developer and has been the operator of JLEN's AD portfolio since the assets were acquired between 2017 to 2019. Anaerobic digestion is a process that uses microorganisms to break down biodegradable material to produce fuels such as biogas.
Future Biogas is a portfolio company of London-listed investor 3i Infrastructure PLC, which is contributing GBP30 million of the purchase price. The rest will be funded by Future Biogas from debt facilities.
JLEN Environmental will continue to own the remaining 49% of the AD portfolio, which has a combined generating capacity of 38 megawatts, as well as its interests in three additional AD assets not included in the agreement.
Chair Ed Warner said: "This deal is a great outcome for JLEN, enabling us to recycle capital within the portfolio, while continuing to benefit from the future growth and income generated by this attractive AD Portfolio. This is the company's second divestment, following the sale of our French wind assets in January 2022."
JLEN Environmental intends on using proceeds from the sale to pay down debt and carry out share buybacks, as long as the company can guarantee it maintains a robust balance sheet and meet existing commitments.
Of the the GBP68.1 million, GBP20 million will be allocated towards the buyback programme with the company aiming to repurchase up to 15% of its issued shares.
Authority to conduct the buyback will expire at the next annual general meeting scheduled for September, although JLEN Environmental plans to renew that authority if necessary.
The board continues to progress targeted asset sales to further recycle capital within the portfolio, it said.
JLEN Environmental shares were up 1.6% to 94.50 pence each in London on Thursday morning.
By Elijah Dale, Alliance News reporter
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