Good Energy offloads solar and wind asset ahead of shareholder showdown with rival firm
Good Energy Group (Good Energy) has offloaded a portfolio of solar and wind sites as part of a strategic sales process overseen by KMPG, despite pressure from activist investors to keep hold of its generation assets.
The energy supplier has sold a 47.5 megawatt peak (MWp) renewable estate to Bluefield Solar, in a deal that could reach £24.5m.
The package consists of a 30.1 MWp portfolio of six ground mounted solar assets in South West England and 17.4 MWp portfolio of two wind assets in South West and North England.
Rival energy firm Ecotricity, which owns a 25 per cent stake in Good Energy, sent a requisition notice to the energy firm on Christmas Eve.
This follows previous attempts from the supplier to take over Good Energy being knocked back by shareholders.
It has filed a motion to oust chairman William Whitehorn as a director and to stop the board selling further generation assets without shareholder approval.
A general meeting to vote on the resolutions will be held on 11 February, with Good Energy’s board recommending shareholders vote against both proposals.
Good Energy wants to push forward with selling its generational assets, with supplier the pursuing a decentralised strategy focused on buying power from renewables generators for 175,000 customers rather than building and operating its own infrastructure.
Commenting on the sale, Good Energy chief executive Nigel Pocklington said: “The sale of our generation portfolio is a transformational moment for Good Energy and a fantastic deal for all of our stakeholders. Good Energy did the hard work getting these sites built, and now we are recycling that capital from our past to invest in our future.”
Following Ecotricity’s requisition notice, Good Energy criticised the rival’s “disruptive behaviour.”
In a statement to the London Stock Exchange, the company said: “The board believes Ecotricity’s actions are motivated by its position as a competitor of the company and that it is seeking to block the company’s ability to push forward with its successful modern, digital first strategy for the benefit of all shareholders. Last year, we outlined our clear strategic direction to capitalise on a rapidly growing market in decentralised, digitised clean energy and transport services, based on 100% ‘real’ renewable power. “
Ecotricity’s founder Dale Vince slammed the decision to sell assets to Bluefield Solar, describing generation as the “very best protection against market volatility”.
He noted that none of the energy firms that have fallen amid the energy crisis had their own generation portfolio.
Vince also told City PM the board is “afraid of a shareholder vote” and is desperately looking to offload assets to cover reported £5m losses.
Commenting on the ensuing drama both between firms, he said: “Previously they offered us the resignation of their Chairman if we would drop our opposition to the sale of their generation assets. We refused, and this is their reaction. Shareholders should be able to have a say, because this sale represents the break-up of Good Energy and will destroy shareholder value. It is a strategic blunder.”
Meanwhile, Bluefield Solar hopes the deal will further its plans to snap up and manage UK-based renewable energy and storage assets to provide growing dividends for its shareholders while furthering the decarbonisation of the energy system.
The deal has boosted its total installed capacity of its portfolio to 673 MWp.
It has also increased its level of total outstanding debt to just under £400m, with the buyout being funded through the company’s revolving credit facility, and also contains £39.1m of long term portfolio debt provided by Gravis.
Bluefield Solar will receive the economic benefit of all cashflows from the portfolio since last July,
John Rennocks, chairman of the income fund, said: “We are delighted to have acquired this high-quality portfolio of operating assets from Good Energy. Not only does this acquisition mark our second purchase of operational wind assets within the space of six months, but it also adds a very attractive portfolio of solar assets with a high proportion of regulated revenues to the company’s significant existing portfolio.”