UK energy firm to buy wind utility

Australian
08/01/2008 Page: 22

BRITISH utility Scottish & Southern Energy will acquire Airtricity Holdings in a deal that values the wind energy company at €1.08 billion ($1.8 billion), marking its first foray into continental Europe and Asian markets and a big push into renewable energy.

The Perth, Scotland, utility plans to use Dublin-based Airtricity as a platform to develop a pan-European renewable-power business. The purchase would boost Scottish & Southern's renewable-energy portfolio to just over 1900MW and increase its wind energy development portfolio to almost 10,000MW.

Airtricity has onshore and offshore wind farms in operation, construction and development in Britain, Ireland, continental Europe and Asia. The European Union and China say they want to generate about 20 per cent of their power from renewable energy by 2020.

Scottish & Southern said it would acquire Airtricity from the company's main shareholders, which include renewable-energy and waste-management company NTR, investment fund Ecofin Water & Power Opportunities and a group of Irish investors. The deal is the latest in a series of wind-portfolio acquisitions over the past year.

German utility E.ON bought Airtricity's North American business for $US1.4 billion ($1.6 billion) in October and Danish utility Dong Energy's Spanish and Portuguese wind energy assets for about €700 million in August. Scottish & Southern, which will assume €375 million in net debt from Airtricity, said the deal was expected to enhance earnings starting in 2011 and would be subject to regulatory approval in Ireland and Northern Ireland.

In addition to the 1.08 billion, S&S will pay Airtricity's shareholders €746.5 million to cover the net proceeds of the sale of the North American unit. As a result, the total payable to Airtricity's shareholders will be €1.83 billion.