EDPR to sell stake in onshore wind portfolio in Spain, France, Belgium and Portugal

19 Jan 2016 – EDP Renováveis [ELI:EDPR] has hired Citi to advise on a stake sale of its onshore wind portfolio in Spain, Portugal, France and Belgium, said two sources and four sector bankers familiar with the situation.

The portfolio has an installed capacity of 665MW and all assets are operational, and EDPR is looking to dispose of a 49% stake, the first source said.

Indicative bids are expected at the end of January, and the final phase of the sale process will commence in February, the first source said.

King & Wood Mallesons (KWM) has been mandated as legal adviser on the sale, the first source and first sector banker said.

KWM, Citi and EDPR did not respond to requests for comment.

EDPR will sell the stake as an alternative to the previously mooted listing of a yieldco of its European wind generation assets, the second banker said.

EDPR, which is 77.5% controlled by Energias de Portugal (EDP) [ELI:EDP], started its work on the yieldco listing in June 2015 but pulled out in September 2015 because yields demanded by the market were too high, as reported.

Yieldcos are listed companies comprising a bundle of assets with long-term contracts that have predictable cash flows and can maximise dividend payments.

The initial portfolio of EDPR’s yieldco was to include several wind farms in Spain, Portugal, France and Belgium, with installed capacity of 993MW. It was expected to go to market with net profit of EUR 50m, EBITDA of EUR 250m, and revenues of EUR 320m, according to previous reports.

The yieldco was cancelled last year because there was no market, the second source said. “We still think there is no market, even though the yields have gone down from 8%-9%, but still not at the levels they were earlier in the year,” the second source added.

Earlier this month, EDPR announced it was selling 49% of its Polish and Italian windpower assets to ACE Poland and ACE Italy for EUR 392m. The transaction scope covers 392MW in operation in Poland and 100MW in Italy as well as 107MW under construction in Poland and in Italy.

by Katie McQue, Rupert Cocke and Nelson Rodrigues