Innergex Renewable Energy announced that it has agreed to sell its wholly-owned subsidiary Magma Energy Sweden to a Macquarie Infrastructure and Real Assets managed European infrastructure fund for $304.8m.
Innergex’s wholly-owned subsidiary Magma Energy owns an equity interest of approximately 53.9% in HS Orka.
HS Orka owns two operating geothermal facilities, namely Reykjanes and Svartsengi with a combined capacity of 174MW, and a 10MW Brúarvirkjun run-of-river hydro project which is under construction.
Besides, HS Orka has a number of prospective renewable power projects along with a 30% equity interest in the Blue Lagoon geothermal spa and resort in innergexIceland.
Innergex president and chief executive officer Michel Letellier said: “This transaction is highly strategic and will create significant value for Innergex as it allows us to focus on our core markets, reimburse our one-year credit facility, deleverage our corporate credit facilities and reduce our exposure to foreign exchange.
“Given Innergex’s non-operatorship role in HS Orka, we viewed the sale of this non-core asset to be consistent with our long-term strategy of developing, owning and operating high quality renewable energy assets in our core markets and competencies.”
Innergex Energy intends to use the net proceeds from the sale to reimburse the one-year credit facility worth $170m, contracted in October 2018 during the acquisition of the remaining interest in the Cartier wind farms and operating entities.
In October last years, Innergex acquired 62% stake in Cartier wind farms, with 590MW of total capacity, from TransCanada. The wind farms generate nearly 1780GWh of clean power annually, which could power about 80,900 Canadian homes.
The transaction involving Magma Energy Sweden is subject to the satisfaction of certain closing conditions, including receipt of key third party consents, a right of first refusal in respect of the shares of Magma Sweden, and other customary conditions.
Innergex intends to satisfy all required conditions by the second quarter of 2019 and move the transaction towards completion following the satisfaction of conditions. For this transaction, BMO Capital Markets and Stöplar Advisory are serving as financial advisors and McCarthy Tétrault is serving as legal counsel for Innergex.