Spain's Ezentis to absorb solar biz with 5.6 GW of contracts

Solar system in southern Italy. Author: Richard Allaway. License: Creative Commons, Attribution 2.0 Generic.

July 1 (Renewables Now) - Grupo Ezentis SA (BME:EZE), a Spanish group dedicated to building and operating power and telecommunications infrastructure, announced on Wednesday that its board of directors approved a proposal to absorb solar PV-sector business Rocio Servicios Fotovoltaicos SLU.

The Catalonia-based Rocio designs and builds solar farms, and provides operation and maintenance (O&M) services. The company is controlled, through subsidiaries, by Spanish businessman Jose Elias Navarro, who is also president and a majority shareholder of renewables developer Audax Renovables SA (BME:ADX) and owner of a 28.6% stake in Ezentis.

Through merger by absorption, Ezentis stands to inherit Rocio’s exclusive framework contracts for the construction and O&M of 5.6 GW worth of renewable energy projects, mostly solar and mainly with Audax Renovables, but also third parties. The projects are located in Spain, Portugal and Italy.

Ezentis calculates that construction and operation of the 5.6-GW portfolio would bring it EUR 2.84 billion (USD 3.37bn) in revenues and EUR 292 million in EBITDA in 2021-2026. The O&M and repowering contracts could contribute EUR 3.83 billion and an EUR 661 million in estimated EBITDA in 2027-2061, assuming the O&M agreement extensions for up to 35 years, Ezentis said in a bourse filing.

The parties proposed to trade shares as part of their agreement -- 226,107 new Ezentis shares for each of Rocio’s stock.

The formula would give Audax Green SLU, the sole owner of Rocio, a 59.4% stake in Ezentis. Under the Spanish law, this position requires Audax Green to launch a takeover bid for the rest of Ezentis. Ezentis said it would file a petition with the market regulator to be exempt from the takeover action since the merger would help the company expand its portfolio of services and effectively create a new business line.

Ezentis’ services in the power sector are limited to construction, operation and maintenance of electricity distribution networks and management of substations and grids. The company said the merger would give it access to the solar markets of Spain, Portugal and Italy, which are expected to reach 60 GW to 70 GW by 2030, and allow it to capture some of the construction and O&M growth.

(EUR 1.0 = USD 1.187)

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Sladjana has significant experience as a Spain-focused business news reporter and is now diving deeper into the global renewable energy industry. She is the person to seek if you need information about Latin American renewables and the Spanish market.

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