Acquisition of Greenpark
- Acquisition of Greenpark for total consideration of up to £5.725 million
- Strategic acquisition of a coal mine methane ("CMM") and power response power generation business
- The Acquisition is expected to be earnings enhancing
- The Greenpark Acquisition brings:
- total power generation of 46GWh for the year ended 31 December 2011;
- 8MW of CMM capacity from 3 sites;
- 21MW of power response capacity from 5 sites;
- 9 sites in total close to Alkane's operating geographical area with a total of 45MW of existing grid connection capacity and further additional grid potential;
- 16 modular reciprocating engines and associated plant and equipment with an estimated book value of approx. £9 million;
- access to 7 CMM gas exploitation licences expected to extend the Group's CMM roll-out programme; and
- Greenpark management estimates of unaudited revenue and EBITDA related to the CMM and power response business being acquired of c. £3.4 million and c. £1.9 million, respectively, for the year ended 31 December 2011.
- Acquisition conditional on satisfaction of certain conditions precedent expected to occur during March 2012, with a longstop date of 30 April 2012
- The Acquisition has been financed by conditional funding arrangements to:
- extend and add additional banking facilities, increasing total facilities to £9.5 million, to be provided by Lloyds TSB Bank (currently drawn prior to the Acquisition at approx. £5.0 million);
- the issue of a £2.0 million convertible loan; and
- the issue of £250,000 in Alkane ordinary shares.
The Company will publish its results for the year ended 31 December 2011 on 7 March 2012 and today provides an update on trading.
- Outline numbers for the Company for 2011 are:
- revenue of c.£9.5 million (2010: £6.6m);
- full year electricity output of circa 140GWh (2010: 120GWh); and
- average electricity sales price for 2011 is expected to be approximately £51/MWh (2010: £44/MWh).
- 60% of 2012 output, excluding capacity from the Acquisition, now contracted at an average price of £56/MWh
- Current price weakness in power market
Neil O'Brien, Chief Executive Officer, commented on the acquisition:
'This acquisition is a significant step change in the scale of Alkane and adds significantly to our operating capacity and project pipeline. In addition, the acquisition will allow us to triple our capacity in power response for the National Grid.'
This article is for information and discussion purposes only and does not form a recommendation
to invest or otherwise. The value of an investment may fall. The investments referred to in this
article may not be suitable for all investors, and if in doubt, an investor should seek advice from
a qualified investment adviser. More