UK's REG to sell business to BlackRock fund, wind up

UK firm Renewable Energy Generation Ltd (LON:WIND), or REG, is to sell its business to BlackRock Inc (NYSE:BLK), wind up and return cash to shareholders, falling victim to the changes to UK renewables policy.

The company said Wednesday it has agreed to sell its entire business in a deal with a fund managed by BlackRock that values its equity before exit costs at GBP 64.5 million (USD 97.2m/EUR 91.6m). The transaction is subject to shareholder approval.

REG, which has been partnering with BlackRock since 2013, expects to pay initial liquidation distribution of GBP 0.6 per share, a premium of 61.1% to the closing price on October 8, the day before it said it had received an initial non-binding offer. There could be a final distribution of up to a further GBP 0.003.

Under the deal, the company will sell its operating and consented wind and solar project assets to the BlackRock fund. These include 34.7 MW of operational wind farms, a 2.64-MWp solar project and 34.8 MW of onshore wind projects in procurement or construction.

The remaining business will be sold to a new company owned by Manco EBT, established for the benefit of REG's executive directors and members of senior management. The plans are Manco to complete the construction of the consented assets after the sale.

REG said that the newly elected UK government had started a "process of dismantling green incentives" on June 18, 2015 and that taken together the proposed policy changes would have a "profound" impact on the company.

(GBP 1.0 = USD 1.506/EUR 1.420)

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