SIMEC Atlantis drops hydro buy to get more funds, posts expanded 2018 loss

The Uskmouth power station in Wales. Author: Reading Tom. License: Attribution 2.0 Generic (CC BY 2.0)

June 28 (Renewables Now) - SIMEC Atlantis Energy Ltd (LON:SAE) has secured additional funds for the execution of its 220-MW Uskmouth waste-to-energy conversion project after cancelling the purchase of certain hydro assets from its largest shareholder.

The company was supposed to buy UK mini-hydro developer and operator Green Highland Renewables (GHR) from its own largest shareholder SIMEC Energy for an enterprise value of GBP 124.7 million (USD 158m/EUR 138.9m). Atlantis even raised GBP 5 million through a private placement in late March to support the transaction. Close to 62.88 million new ordinary shares were issued to SIMEC back then.

Earlier this month, however, Atlantis said it had decided to abandon the planned acquisition in the initially-agreed form and today announced a couple of new stipulations that will release the SIMEC group from its obligations under the sale and purchase contract.

More specifically, SIMEC, which currently holds a 49.99% stake in the tidal power expert, has agreed to pay Atlantis the sum of GBP 5.03 million in cash in instalments and, in addition to that, make available a GBP-2-million interest free committed debt facility. The term of the loan ends on May 31, 2022.

"Although not the original intention, this is an excellent outcome for Atlantis. We will end up with more near-term cash to deploy on key development projects which are intended to deliver the largest possible returns for investors,” stated CEO Tim Cornelius.

Also today, Atlantis posted preliminary financial results for 2018, including overall group losses of GBP 24 million compared with a deficit of GBP 10.6 million a year back. The company explained the expanded loss with the significant changes that took place in the group during the 12-month period, including the acquisition of SIMEC Uskmouth Power Limited.

The flagship tidal power project MeyGen generated revenues of GBP 2.1 million as the 6-MW Phase 1A commenced operations.

(GBP 1.0 = USD 1.268/EUR 1.114)

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Ivan is the mergers and acquisitions expert in Renewables Now with a passion for big deals and ambitious capacity plans.

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