Grenergy sells Atacama stake to ContourGlobal in $962 mln deal, shares surge 19%

Investing.com -- Grenergy Renovables (BME:GREG ) announced on Tuesday, after market close, a deal involving the sale of a portion of its Atacama solar-plus-battery portfolio to ContourGlobal, a company owned by KKR.

Shares of the renewable energy producer surged over 19% on Wednesday at 5:52 ET (10:55 GMT).

This transaction, valued at approximately $962 million, marks a major milestone in the renewable energy sector and is being seen as a critical move for Grenergy’s financial and operational strategy.

The sale covers phases 1, 2, and 3 of the Atacama project, collectively representing substantial solar power and energy storage capacity. 

Phases 1 and 2, encompassing 221 MW of solar capacity and 1.24 GWh of battery storage, are being sold for $490 million. Phase 3, with 230 MW and 1.3 GWh, accounts for $472 million. The deal reflects a valuation multiple of 1.55x EV/IC, aligning closely with Grenergy’s strategic and financial goals.

This transaction is expected to bolster Grenergy's balance sheet significantly. Immediate cash proceeds of $256 million will be realized in the fourth quarter of 2024, with additional proceeds in subsequent years. 

RBC Capital Markets analysts estimate that this will enable the company to reduce its net debt-to-EBITDA ratio from approximately 18x to a proforma level of 1x. Analysts also forecast a capital gain of around €100 million in the fourth quarter and an additional €200 million in 2025.

The remaining Atacama assets, which include 1.5 GW of solar and 8.6 GWh of battery storage, continue to hold potential. 

Grenergy is actively pursuing project financing for phase 4 and power purchase agreements for phases 5 and 6, signaling further expansion and revenue opportunities.

“Given the strong balance sheet from this transaction (and Allianz (ETR:ALVG )) and the high number of investment opportunities in batteries with high returns, we believe Grenergy could provide further good news to the market in the near future now that Atacama looks close to being fully achieved,” RBC said.

The move positions the company to capitalize on high-return opportunities in the rapidly growing energy storage sector, reinforcing expectations of robust performance in the coming years.

This divestment underscores the accelerating shift toward renewable energy infrastructure and highlights the growing investor appetite for large-scale solar and battery projects. 

For Grenergy, the deal with ContourGlobal not only addresses financial stability but also paves the way for new growth avenues within the renewable energy domain.

Source: Investing.com