Renewable Energy (LSE:REH)
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5 Years : From Sep 2011 to Sep 2016
RNS Number : 3483T
Renewable Energy Holdings plc
05 December 2011
2 December 2011
Renewable Energy Holdings plc
("REH" or the "Company")
Update regarding 81MW Wind Farm in Wales
Renewable Energy Holdings plc (AIM: REH), the AIM quoted investor and operator of proven and innovative renewable energy technologies, is pleased to announce that it signed an amendment agreement on 24 November 2011 ("Amendment Agreement") with Howard Evans and others, the developers of the potential 81MW Welsh wind farm (together, the "Developers") over which REH has an option, agreeing certain changes to the conditional sale and purchase agreement dated 04 November 2008 ("SPA") entered between the Company and the Developers' special purpose vehicle, Mynydd y Gwynt (the "DevCo") and previously announced in November 2008.
Under the original terms of the SPA, REH was granted an option at a cost of GBP750,000 to purchase 100% of Devco for a total consideration of GBP15.93 million, to be satisfied in tranches of GBP12.18 million payable upon DevCo obtaining all required planning, construction and operating permits for the 69MW wind farm site (the "Deferred Consideration") and a GBP3 million loan note redeemable on completion of construction of the wind farm. These payments include the prepayment of 25 years of ground rents and easements on the wind farm site. The SPA had a longstop date of 31 December 2009, which was extended in September 2009 to 31 December 2011.
Under the Amendment Agreement, the parties have agreed that, inter alia:
(i) The Deferred Consideration will be payable, subject to obtaining satisfactory financing, 90 days following the date that DevCo obtains all the required development consents, and will be changed to GBP225,000 per consented MW.
(ii) The number of wind turbines intended to be built is 27, depending on planning permission, therefore the total capacity of the wind farm is intended to be up to 81MW.
(iii) The longstop date is extended to 31 December 2020.
(iv) On 24 November 2011, REH was issued 2000 preference shares in the capital of DevCo. REH have effective control of the board and shareholders' meetings of DevCo. REH will lose their preference share rights if all conditions, including obtaining financing and planning consent, are not met before the longstop date.
(v) As a consequence, REH will immediately take over the management and control of DevCo and will manage the remaining stages of the development consent application process. Application for such development consent is currently scheduled to be submitted in Q1 2012.
(vi) The acquisition of the remaining shares is dependent on the satisfaction of all conditions under the SPA, including obtaining financing and the relevant planning consents.
(vii) REH will also assume responsibility for the costs of the project to consent (expected to be approximately GBP300,000).
Mike Proffitt, Chief Executive Officer of REH, commented:
"I am pleased to announce the amendment to our agreement with DevCo - this project will stand on a 1,500 acre site, with an average hub height of 1,800 feet above sea level (an independent wind study indicating an average wind speed at hub height of 9 meters per second). REH's management team taking control of DevCo and the planning and consenting process going forward will assist in the wind farm's realisation and the consequent value creation."
For further information, please contact:
Renewable Energy Holdings plc Tel: +44 (0) 16 2464
Mike Proffitt, Chief Executive 1199
Strand Hanson Limited Tel: +44 (0) 20 7409
Rory Murphy / James Spinney 3494
Novus Capital Markets Ltd Tel: +44 (0)20 7107
Nicholas Lee 1881
Financial Dynamics Tel: +44 (0) 20 7831
Billy Clegg / Ed Westropp / Alex Beagley 3113
This information is provided by RNS
The company news service from the London Stock Exchange