REG - Good Energy Group - Strategic disposal of generation portfolio

Good EnergyAnnouncement

20/01/2022 07:05

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RNS Number : 0218Z  Good Energy Group PLC  20 January 2022

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

Good Energy Group PLC

 

("Good Energy" or "the Company")

 

Strategic disposal of generation portfolio for up to £24.5m

Good Energy Group PLC (AIM:  GOOD), the 100% renewable electricity supplier
and innovative energy services provider, today announces the disposal of its
47.5MW renewable generation asset portfolio (the "Disposal") as part of an
ongoing strategic shift to energy and mobility services.

Transaction summary

As previously announced in a strategic update on 25 November 2021, the Company
appointed KPMG LLP to lead a sale process for the Company's entire 47.5MW
generation portfolio. Following a competitive process, the disposal of the
portfolio has been completed with Bluefield Solar Income Fund ("BSIF") who are
advised by Bluefield Partners LLP.

The Disposal is for a total consideration of up to £24.5m. This consists of
initial and deferred consideration elements:

 * Initial consideration of £16.4m, less distribution since the lockbox date of
£0.7m. Cash proceeds of £15.7m were received on completion.

 * Deferred consideration of up to £8.1m, will largely be calculated with
reference to an agreed financial model and based on the actual operational,
technical, real estate and financial position of the projects. It is
anticipated that this process will be substantially completed, and payments
made by the end of February 2022.

 * The transaction is at a premium to net book value. As of 30 June 2021, the
portfolio was held on the balance sheet at a net book value of £17.7m, with
gross assets of £56.8m and debt outstanding of £39.1m. The portfolio
recorded pre-tax profits of £0.2m in the six months ended 30 June 2021.

 *  The Company is now substantially debt free with a strong cash position,
strengthening the Company's balance sheet.

 * The 47.5MW generation portfolio provides around 15% of Good Energy
customers' electricity and will continue to do so via existing power purchase
agreements.

 * Bluefield previously acquired the Good Energy developed West Raynham Solar
Farm in 2015.

 * The Company was advised by KPMG LLP as financial advisor regarding the
Disposal. Norton Rose Fulbright are its retained legal advisors.

Investing for growth

 * Proceeds from the transaction will be used to accelerate and support further
investments across both transport and decentralised energy to deliver Good
Energy's strategic plan. These investments will not occur all at once and in
the meantime, proceeds have further strengthened the Company's balance sheet.

 * The Company intends to participate in the current funding round being
undertaken by its subsidiary Zap-Map. This will allow Zap-Map to embark on its
next course of commercial and development goals, which will crystallise its
leading position for its market services in the UK and initiate steps of
international expansion to selected territories.

 * The Company is currently building a new platform for its decentralised energy
service business, to enhance existing products and propositions and deliver
new services for feed in tariff customers. This platform will enable smart
export for solar customers, and the ability to pay actual as opposed to deemed
rates, providing material benefits to the business and customers.

 * Good Energy is a supplier of 100% renewable power and an innovator in energy
services. It has long term Power Purchase Agreements with a community of 1,900
independent UK generators which underpin its commitment to supplying renewable
power and Uswitch Green Tariff Gold Standard and Which? Eco Provider
accreditations. The generation portfolio supplied approximately 15% of Good
Energy's total customer demand. The Company will maintain existing PPA
arrangements with the sites after the Disposal and continue to expand
relationships with more UK generators.

Nigel Pocklington, Chief Executive Officer of Good Energy, said:

"The sale of our generation portfolio at a premium to book value is a
transformational moment for Good Energy and a fantastic deal for all of our
stakeholders. We are using the capital from our past, to invest in our future.

"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.

"We are ideally positioned to benefit from this trend through our investment
in Zap-Map, the UK's leading EV app, and our growing stable of other energy
products and services.

"We expect to make further investments across both transport and decentralised
energy to deliver our strategic plan, which we believe has massive headroom
for growth.

"Alongside these investments into mobility and energy services, this
transaction reduces debt and further strengthens our balance sheet, which is
particularly important given the current volatility in the energy market."
 

Neil Wood, Bluefield Partners LLP, said:

"Bluefield's success in this process is a mark of our commitment to the UK
renewables sector and drive to find high quality, highly regulated assets for
our shareholders. They are a great fit for our existing operational
portfolio."

 

Enquiries

 

 Good Energy Group PLC                                   Email: press@goodenergy.co.uk

 Nigel Pocklington, Chief Executive

 Charlie Parry, Head of Investor Relations & CoSec

 Luke Bigwood, Director of External Affairs

 SEC Newgate UK                                          Email: GoodEnergy@secnewgate.co.uk
 Elisabeth Cowell                                        Tel: +44 (0)7900 248213

 Investec Bank plc (Nominated Adviser and Joint Broker)
 Sara Hale / Jeremy Ellis                                Tel: +44 (0) 20 7597 5970

 Canaccord Genuity Limited (Joint Broker)

 Henry Fitzgerald-O'Connor                               Tel: +44 (0) 20 7523 4617

 

About Good Energy www.goodenergy.co.uk

 

Good Energy is a supplier of 100% renewable power and an innovator in energy
services. It has long term Power Purchase Agreements with a community of 1,900
independent UK generators.

 

Since it was founded 20 years ago, the company has been at the forefront of
the charge towards a cleaner, distributed energy system. Its mission is to
support UK households and businesses generate, store and share clean power.

 

Good Energy is recognised as a leader in this market, through our green kite
accreditation with the London Stock Exchange and as the only energy supplier
with Gold Standard Uswitch Green Tariff Accreditation for all tariffs.

 

About Zap-Map www.zap-map.com/live/

Launched in June 2014, with a mission to accelerate the shift to electric
vehicles (EV) and help the drive towards zero carbon mobility, Zap-Map is the
UKÕs leading EV mapping service. The charging point map, available on desktop
and iOS/Android apps, helps EV drivers to search for available charge points,
plan longer journeys, pay for charging on participating networks and share
updates with other drivers.

Zap-Map currently has more than 320,000 registered users, and over 95% of the
UKÕs public points on its network. Over 70% of UK EV drivers have downloaded
Zap-Map, with growth in Zap-Map downloads more than keeping pace with the
rapid growth in the EV market.

For more information, please visit www.zap-map.com.

 

Strategic rationale - acceleration of strategic shift to Energy & Mobility
services

 

The transaction follows the announcement on 25 November 2021 regarding the
Group's intention to dispose of the generation portfolio, through a managed
sale process.

 

Prior to this announcement, the Company had outlined a clear strategic
direction to capitalise on a rapidly growing market in decentralised,
digitised clean energy and transport services based on 100% 'real' renewable
power. This strategic direction received strong shareholder support throughout
our successful defence of the recent hostile takeover attempt.

 

The Company is accelerating its transition to an energy services provider,
leading in selected areas of electric transport and decentralised generation
as the energy transition continues to gather pace. With 100% renewable energy
remaining core to the business, the Company will take several important steps
towards accelerating this strategic shift.

 

Details of the transaction

á    Good Energy has divested the entire issued share capital of Good
Energy Holding Company No.1 Limited ("Holdco" or "Target") (the
"Transaction"). Holdco owns eight operational energy producing assets through
its subsidiary Good Energy Generation Assets No.1 Limited ("GEGAN").

 

o  All figures have been completed as of 30 June 2021, with final amounts
calculated via a lockbox mechanism as at the completion date.

o  The long-term debt facilities provided by Gravis Capital Partners
(ÒGravisÓ) through GCP Green Energy 1 Limited, have transferred with the
assets as part of the Disposal.

 

á    Total consideration of up to £24.5m, will be split between an
initial consideration and deferred consideration:

 

o  Initial consideration of £16.4m, less distribution since the lockbox date
of £0.7m. Cash proceeds of £15.7m were received on completion.

 

o  Deferred consideration of up to £8.1m, will largely be calculated with
reference to an agreed financial model and based on the actual operational,
technical, real estate and financial position of the projects. It is
anticipated that this process will be substantially completed, and payments
made by the end of February 2022.

 

o  There are the following elements of deferred consideration. Energy yield
and power purchase agreements, technical assessments of site conditions, asset
life and finance and tax.

 

 

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