TIDMSAE
RNS Number : 7076R
SIMEC Atlantis Energy Limited
31 October 2019
The information contained in this announcement is inside
information under the Market Abuse Regulation (EU) No 596 / 2014.
The person responsible for arranging the release of this
announcement on behalf of SIMEC Atlantis Energy Limited is Tim
Cornelius, Chief Executive Officer of SIMEC Atlantis Energy
Limited.
31(st) October 2019
SIMEC ATLANTIS ENERGY LIMITED
("Atlantis" or the "Company")
Atlantis announces the acquisition of Green Highland
Renewables
Atlantis, further to the announcement on 28 June 2019, is
delighted to announce the acquisition of the Green Highland
Renewables project development, asset management, operation and
maintenance business ("GHR") from SIMEC Energy. GHR is a profitable
business with high growth prospects which provides a complete range
of management, operation and maintenance solutions and services to
hydro generation asset owners throughout the UK. GHR has consented
more than 65 hydro schemes, built more than 45 hydro schemes and
provides operation and maintenance services for more than 45 hydro
schemes in the UK.
Highlights
-- Atlantis will acquire 100% of GHR for a nominal cash sum of GBP1.00 from SIMEC Energy
-- The GHR business is expected to deliver immediate, positive
cash flow to Atlantis via long term asset management, operations
and maintenance contracts on hydro assets throughout the UK
-- The GHR senior management team will be integrated into the
Atlantis senior management team with immediate effect
-- GHR will retain its independent branding and will continue to
service more than 45 hydro clients operating as GHR. Revenue growth
will be achieved through the provision of services to existing
Atlantis portfolio assets such as MeyGen and Uskmouth as well as
other assets within the broader operational SIMEC Energy
portfolio
-- An infrastructure fund has acquired all of GHR's operational
and construction assets from SIMEC Energy and the infrastructure
fund has entered into a long-term contract with GHR to provide
management services and maintenance contracts on all of these
assets
-- In addition to growing its O&M and asset management
services agreement through the UK, the GHR project development team
will continue to develop green-field and brown-field hydro
opportunities domestically and abroad for Atlantis
The GHR business
GHR is headquartered in Perth, Scotland and has an operations
base in Dingwall, Scotland with 23 members of staff. GHR has
consented more than 65 hydro schemes, built more than 45 hydro
schemes and provides operation and maintenance services for more
than 45 hydro schemes in the UK.
Revenue from long-term contracts to service is expected to be in
the region of GBP4 million annually with immediate opportunities to
grow the revenues by providing services to other hydro assets
across the current GFG Alliance portfolio. Profits for the year
ended September 2018 which were attributable to GHR's project
development, asset management, operation and maintenance business
were c.GBP200,000 and total assets for this business as at end of
September 2019 were GBP4.3 million.
The GHR management team intends to expand the provision of
services to third party projects and has identified targets for
increasing market share in the Scottish Highlands both within the
existing SIMEC Energy portfolio and with third party asset owners.
GHR has exciting prospects for future revenue growth from customer
expansion throughout the United Kingdom and other green and
brownfield project development opportunities domestically and
abroad. GHR will provide Atlantis with the opportunity to integrate
a highly experienced energy development team with the existing
Atlantis project development unit located in Edinburgh,
Scotland.
The SIMEC group is a related party of the Company for the
purposes of the AIM Rules by virtue of its status as a substantial
shareholder holding 49.99% of the existing ordinary shares. The
independent directors (comprising John Neill, Tim Cornelius, Andrew
Dagley, Ian Wakelin and John Woodley) consider, having consulted
with the Company's nominated adviser, Cantor Fitzgerald Europe,
that the terms of the acquisition are fair and reasonable insofar
as the Company's shareholders are concerned.
Tim Cornelius, CEO of Atlantis, commented:
"We are delighted to welcome the GHR team to Atlantis. We are
building a highly experienced energy development and asset
management team within Atlantis and GHR brings vast experience in
project feasibility analysis, design, consenting, construction
management, operations and maintenance and asset enhancement and
optimisation.
This restructured transaction is the right outcome for Atlantis.
It provides us with more near-term cash to deploy on our flagship
Uskmouth and MeyGen projects which will deliver the largest
possible returns for investors. We have acquired a world class,
cash flow positive, profitable hydro development, consulting and
O&M business which we will integrate with our existing
engineering services business in Scotland to create one of the most
experienced project development teams in the UK. It will allow us
to focus on high margin, development opportunities such as the
Uskmouth conversion project where we can deliver enhanced
shareholder returns.
We will retain all the key staff, IP and know how that has made
the GHR business the first-class business it is today. The
restructured transaction validates the commitment SIMEC is making
to building a world leading project development company with the
Atlantis management team and we are very grateful for their
continued financial, commercial and supply chain support."
Jay Hambro, CEO of SIMEC Energy and Non-Executive Director of
SIMEC Atlantis, commented:
"Today's transaction is a real win-win for both SIMEC and
Atlantis. The GHR development team have a proven track record of
value delivery and will sit well within the Atlantis portfolio.
SIMEC is committed to building the Atlantis portfolio and this
transaction will strengthen the existing management team, provide
long term sustainable and predictable revenues for the group and
strengthen the current Atlantis asset management services
offering."
Stephen Hutt, Managing Director Green Highland Renewables,
commented:
"We are delighted to be joining Atlantis who are developing some
of the most exciting renewable energy projects in the UK at
present. Our team will be an excellent fit. We are looking forward
to working on some of their flagship projects such MeyGen and
Uskmouth as well as building our own portfolio of new hydro
development opportunities in addition to expanding our current
asset management services offerings to more asset owners across the
country."
Enquiries:
SIMEC Atlantis Energy Limited via FTI Consulting
Tim Cornelius, Chief Executive Officer
Andrew Dagley, Chief Financial Officer
Cantor Fitzgerald Europe (Nominated
Adviser and Joint Broker) +44 (0)20 7894 7000
Rick Thompson
David Porter
Michael Boot
J.P. Morgan Cazenove (Joint Broker)
Michael Wentworth Stanley +44 (0) 20 7742 4000
FTI Consulting +44 (0)20 3727 1000
Ben Brewerton
Alex Beagley
Notes to Editors
SIMEC Atlantis Energy
Atlantis is the global developer, owner and operator of
sustainable energy projects with a diverse portfolio of more than
1,000 megawatts in various stages of development. This includes a
77% stake in the world's largest tidal stream power project,
MeyGen, and the conversion of the 220MW Uskmouth Power Station.
In 2017, we entered into a strategic partnership with SIMEC, a
member of the GFG Alliance, to convert the Uskmouth Power Plant to
use an end-of-waste energy pellet as fuel. A successful conversion
will tackle the pressing issue of non-recyclable waste in the UK
and will form the blueprint for other large-scale conversion
projects across the globe.
We intend this to be the first of a number of acquisitions
aiming to transform Atlantis into a diversified energy company of
scale, owning development and generating assets across the
sustainable energy spectrum in Europe, Asia and Australia,
complementing our existing UK pipeline.
www.simecatlantis.com
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END
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