UK’s SeaEnergy Sells Renewables Unit to Focus on Marine
LONDON (Dow Jones)–U.K. offshore wind development company SeaEnergy PLC (SEA.LN) said Monday it has conditionally agreed to sell its loss-making SeaEnergy Renewables Ltd. division to Spanish oil major Repsol YPF SA (REP.MC) for GBP38.8 million, leaving it debt free and with cash to expand its marine division.
Both the 80% stake of the renewables division held by SeaEnergy and the remainder–held by management–will be sold to Repsol. The deal gives SeaEnergy Renewables, or SERL, an enterprise value of GBP50 million, the company said.
SeaEnergy will get GBP30.7 million cash and GBP8.1 million, which represents the investment it has made in the subsidiary. SERL has been loss making since it was founded in 2008 and has been funded by inter-company loans from SeaEnergy.
If the deal is approved by shareholders, SeaEnergy will get around GBP30 million of cash, after the transaction costs, removing debt and leaving some cash leftover, Executive Chairman Steve Remp told Dow Jones Newswires.
SeaEnergy said the proceeds will allow it to focus on SeaEnergy Marine which was set up to design, build and operate vessels that meet the specialized construction, operations and maintenance needs of the offshore wind industry.
Remp said these vessels will be needed by either developers or turbine manufacturers, by 2014. He anticipates 30 to 40 will be needed in U.K. waters within 15 years.
The company said it will pursue its plans for the construction of the first operations and maintenance vessel, once a charter has been secured on acceptable terms.
“We’re in talks with all the major developers and turbine manufacturers trying to negotiate charters. I would hope to see a firm charter by the end of this year, then we’d start building for 2014,” Remp said.
“We’re going to be pursuing alliances, joint ventures, investing a modest amount of money to leverage up again what we’ve already done. Hopefully next time its going to be bigger”, he added.
Remp said in a statement: “We believe that our nascent marine business has a unique vessel concept that will make a material difference to the commercial economics of offshore wind. We look forward to pursuing this exciting opportunity, and to seeking out other projects to leverage our expertise.”
Apart from its renewable and marine divisions, SeaEnergy also has legacy oil and gas assets, including a 40.2% stake in Mesopotamia Petroleum Company and a 23% stake in Lansdowne Oil & Gas PLC (LOGP.LN).
SERL holds a 25% interest in three offshore wind farm sites off the coast of Scotland. The sites are Beatrice, in joint venture with Scottish and Southern Energy PLC (SSE.LN), Moray Firth in joint venture with EDP Renovaveis (EDPR.LB) and Inch Cape.
Broker Ambrian said the sale provides the firm with “the much-needed capital to build out its Marine business, which we believe is likely to generate shareholder value quicker than the offshore wind assets.”
However, the broker warned that its still a “relatively nascent business and, therefore, it will require time to develop.”
Shares at 1220 GMT were down 27.25 pence, or 39.2%, at 42.25 pence in a slightly higher Alternative Investment Market, up 0.04%.
-By Iain Packham, Dow Jones Newswires
Photo courtesy SeaEnergy
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