Bridging loan tides over Econcern, but breakup imminent

www.environmental-finance.com
4 June

Dutch renewable energy company Econcern says it obtained short-term bridging finance earlier this week, and is now seeking to divest itself of potentially all of its joint ventures and operating companies.

"The bridging loan will enable staff to continue to be paid and essential payments to be made," company representative Kate Adlington told Environmental Finance. "Econcern remains in suspension of payments, but not our operating companies." Econcern announced suspension of payments last week, following the expiry of its financing facility on 1 April. Adlington declined to disclose the source or amount of the bridging loan but says clarity about the company's situation would be available "in weeks rather than months".

The company was already seeking to spin off carbon offset and emission project operating company OneCarbon to help ease its finance problems, but now "all options are on the table," Adlington said. "All the operating companies are searching for financial solutions. There could be a takeover of Econcern as a whole or parts of the company." Econcern is the holding company of operating companies: Ecofys, a consultancy; project developer Evelop; solar energy system supplier Ecostream; OneCarbon; and clean-tech incubator Ecoventures. Econcern's joint ventures includes electric vehicle developer Duracar Innovan and wind turbine manufacturer Darwind.

SHV, Rabobank and Delta Lloyd together own 50% of Econcern's shares. Financing is also provided by a further consortium of six banks and by the operating companies, who are able to sell shares to institutional investors.

Econcern's problems are beginning to affect the renewables sector, with Centrosolar Group closing down its Dutch solar module plant last week, after Ecostream Switzerland stopped buying its solar cells. German windfarm developer Plambeck Neue Energien says the Econcern crisis is behind a profit warning for 2009 which it issued last week. Plambeck, which owns 10% of Econcern, says the crisis has disrupted financial closure of the 400MW North Sea Gode Wind I project that it was undertaking jointly with Econcern.

Founded in 1984, Econcern has expanded rapidly in the last few years to become one of the world's largest developers of renewable energy projects. According to its website, it employs around 1,200 people worldwide, and reported profits in 2007 - the last year for which figures are available - of €85 million ($121 million) on revenues of €443 million.