SeaEnergy PLC is pleased to announce that it has reached agreement to dispose of its entire interest in SeaEnergy Renewables Limited (SERL) to Repsol Nuevas Energias SA (Repsol) in a deal which values SERL, created just under three years ago, at an enterprise value of approximately £50 million. Subject to SeaEnergy shareholder approval, the Company will dispose of its 80.13% interest in SERL, which has an interest in three offshore wind farm sites off the coast of Scotland, in return for a cash consideration of £30.7 million and the full recovery of its £8.1 million investment in SERL. The remaining share capital, held by SERL’s management, will also be acquired by Repsol, which has, in turn formed a consortium with EDP Renov?veis (EDPR) to further develop two of SERL’s projects.
EDPR already holds a 75% majority interest in the Moray Firth Wind Farm Project, in which a subsidiary of SERL holds the remaining 25%. SERL has been loss making since it was founded and has been funded by way of inter-company loans by SeaEnergy. A circular, convening a general meeting, will be sent to shareholders shortly. SeaEnergy will now focus on its existing assets, in particular its offshore renewables marine services business SeaEnergy Marine, and to ensure that shareholder value is protected with its existing Oil & Gas interests. The Board expects the Company to continue to be active in both the offshore renewables and oil & gas sectors going forward.
Key features of the Disposal include:
- SeaEnergy to receive a total of £38.8 million, £30.7 million for its SERL shares and £8.1 million through the repayment of group debt owed by SERL to SeaEnergy. Additionally, Repsol will fund SERL to allow the repayment of all other loans outstanding by SERL at the time of completion of the Disposal, amounting to approximately £3.2 million;
- SeaEnergy to retain net proceeds of £29.1 million, after transaction costs, following its repayment in full of loans from LC Capital Master Fund, Ltd and EDPR totalling £6.9 million;
- Demonstrates SeaEnergy’s success in building a business worth approximately £50m in just under three years, from its conception in 2008;
- Demonstrates the value created by SeaEnergy’s ability to form strong ongoing relationships with large industry players;
- Disposal includes a Strategic Co-operation Agreement between EDPR and SeaEnergy to seek opportunities for mutual collaboration in relation to the supply by SeaEnergy Marine of operations and maintenance vessels, field infrastructure and equipment installation vessels for offshore wind farms, and any other areas that may arise in the future;
- SeaEnergy retains the right to negotiate a new Strategic Co-operation Agreement with Nantong COSCO Ship Steel Structure Co. Ltd to explore construction and marketing opportunities for steel structure jackets for use with deepwater offshore wind turbines;
- Disposal proceeds will allow SeaEnergy to accelerate the development of the opportunities it has identified in the marine renewables technology solutions industry, through its subsidiary SeaEnergy Marine, benefit from the UK offshore wind sector by partnering with experienced offshore wind companies, and
- SeaEnergy to retain rights to the “SeaEnergy Renewables” name.
Steve Remp, Executive Chairman of SeaEnergy said: “This deal shows how SeaEnergy uses early mover advantage to create value from new opportunities. We created a business out of nothing but a concept, and three years later it has been valued at £50m. The time is right for us to capitalise on this success. This deal allows us to continue to participate in the fast-growing UK and European offshore wind markets, and to build on our enviable track record of working with some of the world’s biggest companies. “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.”