Investing.com -- Shares of Grenergy Renovables soared by 17% following the announcement of its divestment of phases 1, 2, and 3 of the Atacama solar plus batteries project to ContourGlobal, a KKR company, for a total consideration of USD 962 million.
This strategic move, which includes an earn-out of USD 50 million, is seen as a positive step towards strengthening the company's financials and has been well-received by investors.
The sale of the initial two phases for USD 490 million and the third phase for USD 472 million represents a combined enterprise value to invested capital (EV/IC) multiple of 1.55x.
Grenergy anticipates a capital gain of approximately €100 million in the fourth quarter of 2024 and an additional €200 million in 2025. Additionally, the company will receive USD 9.4 million from the pre-financing sale of phase 3.
This transaction, along with a previous deal with Allianz (ETR:ALVG), which had an enterprise value of €270 million and a gain of over €80 million, will significantly reduce Grenergy's net debt to EBITDA ratio from around 18x to a proforma of approximately 1x.
The company also retains about 80% of the remaining Atacama project, which includes 1.5GW and 8.6GWh of capacity, with further project financing and power purchase agreements (PPAs) expected to be announced soon.
RBC analyst Fernando Garcia commented on the deal, stating, "Grenergy's divestment of phases 1-3 of Atacama is the largest solar plus batteries' transaction in the world, in an extremely accretive deal done at 1.55x EV/IC."
The divestment has also alleviated concerns regarding Grenergy's balance sheet that emerged after the company's third-quarter results in 2024. The deal is seen by Garcia as a reinforcement of the belief that 2025 will be a pivotal year for battery technology investments, with Grenergy poised to capitalize on its strengthened balance sheet and the high number of investment opportunities in the sector.
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