Policy & MarketMore
UK's REH to sell wind and wave assets as it admits defeat
The UK’s Renewable Energy Holdings (REH) plans to sell its small portfolio of wind and wave-power interests and return the proceeds to shareholders after deciding there is no point going on.
REH owns a 22% stake in Australian marine technology group Carnegie Wave Energy, for which it will seek “a strategic investor”.
The Isle of Man-based group has two wind developments on its books, which it also plans to sell.
One is the 81MW Mynydd y Gwynt project in Wales, for which REH expects to seek planning consent later this year.
The company says of the Welsh wind farm: “Subject to the granting of the permits, this is a first class project of significant size and value, and during the planning review period it will be pre-marketed to qualified buyers.”
REH will also seek a buyer for its second wind asset, the fully-permitted 30MW Kobylany project in southeast Poland.
The sell-off comes after a year in which REH struggled in vain to raise funds to continue with new developments and saw its London-listed shares fall from a 2008 high of £0.58 to as low as £0.085 this month. It lost £16m ($25.9m) in 2011, including a £12.1m one-off impairment charge relating to its Carnegie investment.
Chief executive Mike Proffitt says: "With the continued difficult capital environment setting the context for the business, the board explored every avenue for achieving value for its shareholders. It is my view that the realisable value of the company's assets significantly exceeds its current market capitalisation.
“Accordingly, a return of those funds to shareholders after an orderly sell-down of assets is the best course of action in light of the current market conditions."
REH will operate on a “least cost basis” while it sells itself out of existence, with head office and staff expenses kept to a minimum. It expects to complete the disposals next year.
The company sold a portfolio of German onshore wind assets to Allianz Renewable Energy for just under €40m in September 2010.
Note: amendment revises down REH share of Carnegie following update from company