Finnish utility Fortum Oyj (HEL:FORTUM) said today it has agreed to sell a 54% share of an Indian solar power subsidiary and its 185-MW photovoltaic (PV) portfolio.
Fortum has signed a deal to offload 40% of the specific entity’s shares to UK Climate Investments, while Elite Alfred Berg will become owner of a 14% interest and will also have the option to buy an additional 16% stake. Estimated on a debt and cash free basis, the deal is worth around EUR 150 million (USD 176.7m), including the effect of deconsolidating Fortum's minority part of the net debt.
Following the transaction, Fortum will keep a minority stake in the Indian solar power company and will operate and maintain the four PV parks of its portfolio under a long-term agreement.
"The arrangement frees up capital for further investments and enables Fortum to continue to utilise its key competencies to develop, construct and operate solar power plants in India," says Kari Kautinen, senior vice president for merger and acquisition and solar and wind development at Fortum.
The deal is subject to approvals by European Union (EU) regulators and is seen to be completed at the start of the July-September quarter. The Finnish group anticipates it will have a positive effect on its results of around EUR 20 million, to be reflected in the financial accounts of its solar and wind development unit.
As previously announced, Fortum plans to spend between EUR 200 million and EUR 400 million on solar projects in India.
(EUR 1.0 = USD 1.178)
Choose your newsletter by Renewables Now. Join for free!