Wind energy group Airtricity group has been put on the market with an estimated price €1 billion, a month after its North American division was sold.
The group said on Thursday that following the announcement on 4th October of the agreement to sell its North American business unit, Airtricity has undertaken a review of the strategic options for the remainder of its business. This review has resulted in a decision to commence the process for the sale of Airtricity Holdings Limited. The process is due to be completed by mid 2008.
Credit Suisse and NCB have been retained as financial advisors to the company for the planned transaction.
German utility giant E.ON announced in October that that it was acquiring the North American activities of Irish wind farm operator Airtricity for $1.4 billion. Airtricity had invested €300 million so far in developing Airtricity North America and under the deal's terms, E.ON will take on Airtricity North America's debts. This will result in the Irish parent getting €800 million cash, consisting of a payment of €600 million and the repayment of a €200 million inter-company loan.
NTR (National Toll Roads) owns 51 per cent of Airtricity Holdings.
Chief executive and founder Eddie O'Connor holds 4 per cent of the group's 50 million shares. A €1 billion sale price would value this holding at €20 million.
Other executives hold another 12 per cent, while Ecofin, a specialist investment fund focused on alternative energy and environmental management, owns 16 per cent. Private shareholders hold the balance of the group's stock.
Mark Ennis, director of strategy and public policy, is reported to have said on Thursday that the group's development costs were running at around €1 billion a year.
It has wind farms with the capacity to produce 11,000 megawatts (MW), roughly equal to three average power plants, in its development pipeline in Europe and China, with a further 200MW under construction.
The cost of building these facilities comes to between €1.8 million and €3 million for every megawatt.
Ennis said it was for this reason that shareholders decided to sell. "We felt the best way to fund this would be with an owner who has a significant balance sheet behind them," he said.
He added that a flotation would not be the best option, as after a stock market launch, it would still be left with the ongoing necessity of raising funds through rights issues or other methods. "That did not seem to be the optimum way forward," he said.
Only a small number of Irish companies have developed a significant international presence during the Celtic Tiger period. The sale of Airtricity, a company in a key growth area, will remove the potential for Ireland to add another one to the meagre list that includes, CRH, Ryanair, Digicel and Independent News & Media.
