Tilt has sold Snowtown 2 for $1.07b Enterprise Value, which includes debt.
From Renew Economy, excepts:
"Listed renewable energy company Tilt Renewables has secured the sale of the 270MW Snowtown 2 wind farm in South Australia for the surprisingly high price of $1.07 billion in the biggest single transaction of its type in the country.The sale to Palisade Investment Partners Limited and First State Super follows the start of a “strategic” review launched in June by Tilt which was looking to free up capital for a raft of new investment opportunities in Australia for wind, solar and battery storage projects.
"The deal will see the sale of shares in the Snowtown 2 project worth $472 million, with another $611 million coming in the form of debt that was recently re-financed by Tilt, which also freed up some $86 million in capital thanks to the more generous terms. A sale price of around $800 million had been anticipated.Snowtown 2 was commissioned in 2014 and has a long term power purchase contract with Origin Energy until 2030, with a five year option after that. There is a potential for a solar farm to be added as well.
It is the fourth largest wind farm in the country and this deal is the largest single transaction in the country – although the 420MW Macarthur wind farm has also recently changed hands, albeit in 50 per cent tranches.
That is a very fancy price indeed. There appears abundant capital available for wind farms - deemed to be fashion assets. IFN has the option to sell or JV any of its wind assets while retaining despatch rights through a power purchase agreement. Capital could be redeployed to build new, more efficient and productive wind farms.
I don't see IFN as capital constrained and think it capable of funding eg Flyers Creek on current cash flows and balance sheet.
The point is, RR & team have more cards in their hand, more options, than is commonly recognised. We retail holders cannot know what future steps they are brewing up in the board room, but I expect big ambitions. The electricity generating market is horrendously complex and fluid. Anyone extrapolating current trends too far ahead is, ahem, brave, A misstep now could have serious consequences; get it right and prosperity will follow.
Ash
IFN Price at posting:
61.5¢ Sentiment: Buy Disclosure: Held
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