9th Oct 2015 07:06
LONDON (Alliance News) - Renewable Energy Generation Ltd Friday said it has received non-binding approaches for its subsidiary which holds all of the company's assets and operations, but said its management plans to spin off some of its assets into a new company if the deal goes through.
The unnamed potential buyer is "highly credible" and "fully funded" to implement the offer, according to Renewable Energy Generation, which stressed the offer is not for the listed-company but for its trading subsidiaries. It also stressed that the bid is not formal and not guaranteed to go through.
The offer made would generate a net cash distribution of around 60.0 pence per share, which is a 61% premium to the closing price of Renewable Energy shares on Thursday.
The assets being sought by the buyer include the company's net debt of GBP10.5 million, comprised of GBP26.0 million of debt, GBP2.7 million in restricted cash and GBP12.8 million of unrestricted cash.
"The offer envisages that at the closing of the transaction, certain subsidiaries within the assets will be acquired by a new company formed by the executive management team of Renewable Energy Generation," it said in a statement.
However, Renewable Energy Generation did not state which assets, apart from the debt, will be sold to the buyer and which assets will be spun off following the transaction.
Due to that planned spin-off, related parties to the company are classed as involved in the deal, meaning it is being considered by the company's non-executive directors.
Renewable Energy Generation is involved in solar, wind and biomass assets across the UK. It has four biomass operations, four solar operations and around 14 onshore wind farms, one of which is in Northern Ireland.
"Shareholders should be aware that, in the event the transaction proceeds, it would be the intention of the Independent Directors to also put forward proposals to cancel Renewable Energy Generation's admission to trading on AIM, to place the company into members' voluntary liquidation and thereafter to return available cash to shareholders," said the company.
Shareholders will have to approve the deal at a general meeting, the date of which has not yet been decided by the company. However, the deal will also delay the publication of its full year results, which were due to come out on November 2.
Shares in Renewable Energy Generation were up 48% shortly after market open Friday morning at 55.00 pence, the top gainer on AIM.
By Joshua Warner; [email protected]; @JoshAlliance
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