Greentech Fersa acquisition details

Danish wind farm company Greentech Energy Systems A/S (CPH: GES) said in a press release that Banco Mare Nostrum (BMN) is voting in favour of Greentech’s takaeover of Fersa Energías Renovables, S.A (MCE: FRS). Their Board vote was also mixed but a sufficient majority was reached for the decision to be made. This means that shareholders representing over 30% of shares in Fersa have committed to tender their shares. BMN holds 7.67% of Fersa shares. Greentech has earlier received authorisation from the Spanish Securities Market Commission for the acquisition. One of the conditions for the offer to come to place unless Greentech chooses to waive it is a control of 50% of shares in the Spanish firm being achieved.

Greentech is offering € 0.40 per share, which was an 8% discount on the price when the offer was announced in April. It is also lower than any market trade during the previous 12 months from last April. Most recently the company was trading at 0.38 EUR per share. The deadline for a change in conditions has now been reached. The current acceptance period ends on July 30th.

Acceptance of the bid is also conditional on 12 asset including Mudéfer, Hinojal, Pino, Zarzuela and Pedregoso wind farms in Spain, Hanumanhatti and Gadag Wind Farms in India, Kisielice in Poland, Beausemblant in France and the firm Gestora Fotovoltaica being maintained. Fersa’s Board voted against the offer 7 votes to three but the largest shareholder Grupo Empresarial Enhol, S.L. voted for it. Its 22.5% constitutes the remaining part of the “over 30% of commitments”.

The company has a hair over 140 million shares of 1 Euro each. The bid values the company at around 56 million Euros. Last year it had an operating income of about 45 million Euros and EBITDA of 30 million. Its losses however doubled to 102.5 million Euros on goodwill adjustments stemming from renewable energy facility tariffs and premiums being abolished meaning farms in development lost their profitability prospects, an increase in discount rate in internal investment calculations and continuing credit squeeze in the market. These led to major management changes.

Greentech is majority owned by Italian company GWM Renewable Energy II S.p.A. It aims to finance the bid with external bank loan, a small inter-group subordinated loan arrangement and from its own funds. Later on it aims to divest some of its current assets as a part of the financing plan. With Fersa’s installed capacity of 274 MW and Greentech’s similar size portfolio plus several hundred MW expected to be in operation in 2013, a combined entity could potentially exceed 1000 MW in 2013.