GLOBAL ECOPOWER : Acquisition of two new wind projects and implementation of the new strategy
Aix-en-Provence (France), September 3rd, 2014. Global EcoPower (FR0011289198 - ALGEP) announces the acquisition of two new wind projects with a capacity of 10 MW each. The first project was financed for the first time on the own funds of the company. These two operations will be part of the new strategy implemented by the Group from now on. This strategic evolution, which consists in building the power plants for own account and then selling them to third party investors after the construction, will allow to strengthen the turnover and profitability of the Aix-en-Provence based constructor of power plants.
ACQUISITION OF PROJECT VAY MARSAC OF 10 MW IN THE DEPARTMENT OF LOIRE-ATLANTIQUE
SAS Wind EcoPower, 100% subsidiary of GEP, has acquired 100% of the shares of SAS Parc Eolien de la Vallée du Don which owns all rights and permissions allowing the construction of a wind farm of 10 MW in the municipalities of Vay and Marsac sur Don in the Loire-Atlantique department.
This transaction follows the press release of April 23rd (read here the press release) announcing the signing of the contract subject to conditions precedent. The latter having been lifted, the SAS Wind EcoPower, 100% subsidiary of GEP, completed the final purchase deed of the power plant.
The plant will consist of five wind turbines with a hub height of 100 meters and a unit capacity of 2 MW.
The Group will build the plant "turnkey" before selling it. In order to respect the environmental impact study, the works were split into two phases: the first began in early 2014 and was discontinued in the spring in order to protect the nesting of birds; the second resumed in early September.
10 MW PROJECT IN THE ARDENNES
Global EcoPower announces the signing of a contract for the acquisition of shares of a SPV which owns all rights and permissions allowing the construction of a wind farm of 10 MW in the Ardennes.
The plant will consist of five wind turbines with a hub height of 78 meters and a unit capacity of 2 MW.
As with the previous plant, the purchase agreement was signed under several conditions precedent in favor of GEP. The final signing is scheduled for November 24th, 2014 at the latest.
EVOLUTION OF STRATEGY: CREATION OF ENHANCED VALUE FOR SHAREHOLDERS
Since 2009, Global EcoPower (GEP) was selling power plants before their construction. In this economic model the third party investor intervened early in the process, each time by acquiring the SPV that had all the permissions to build and operate the power plants. GEP chose this strategy since its creation in order to reduce its financial needs, so that the group never got into debt. The third party investor entrusted GEP with the construction "except turbines" and GEP then recognized a turnover representing on average about 18% of the total project investment.
Having demonstrated in the past two years its capacity to complete all the projects that the Group has sold to a third party investor "before construction", i.e. two solar power plants and four wind farms representing a total capacity of 83 MW, Global EcoPower now wishes :
- to acquire the SPV, which already have all the rights and permissions;
- to provide its own funds and organize the financing of the senior debt;
- to build, commission and operate the power plants;
- to sell the operating plants to third party investors.
No major changes in personnel or structure of the company are required to implement this strategy. However, the Group will seek for more capital in order to finance the contribution of equity in the power plants, i.e. between 20% and 30% of the total investment.
With the evolution of its strategy, GEP will recognize in the future a turnover of 100% of the sale of the plant (compared to about 18% previously) and higher profits (in euros) on the transfers of said power plants. Indeed, potential acquirers are more numerous for plants already built and in operation and this competition will allow to optimize the margins of GEP. As a result, the creation of value by the company for its shareholders will be greater in the future.
To date, the Group continues the construction of the last 10.25 MW power plant (part of the 83 MW) which has been the subject of a transfer to the SAS Tramomarina (Leonidas Associates Group) (read here the press release of May 19, 2014).
The two new plants of 10 MW each announced above, will be sold by the GEP group once built and commissioned in accordance with the new strategy.
LEGAL EVOLUTION OF THE SUBSIDIARY SAS WIND ECOPOWER
The SAS Wind EcoPower is currently being transformed into a public limited company 99.5% owned by GEP. It will be called INVESTEOLE SA.
Global EcoPower and INVESTEOLE SA (ex-Wind EcoPower) were accompanied for both transactions, in Loire-Atlantique and Ardennes, by the specialist law firm CGR Legal.
About Global EcoPower (GEP)
Global EcoPower (GEP) based in Aix-en-Provence is a "turnkey" constructor of power plants using renewable wind and solar energies. GEP is listed on the NYSE Alternext Paris Market of NYSE Euronext (ISIN code: FR0011289198 - mnémo: ALGEP).
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