Brookfield makes new acquisition proposal to Renova for over 1 GW wind projects

Renova Energia SA has announced that it has received from Brookfield Energia Renovável SA, the Brazilian subsidiary of Brookfield Asset Management, a new binding proposal replacing the primary contribution offer made in November 2017.

Brookfield initially offered to purchase a controlling stake in the company for BRL 1.4 billion (US$432.2 million), which Renova accepted on 24 November 2017. Brookfield was granted an exclusivity period of 60 days, automatically extendable for a further 30 days, to finalize the documents of the transaction.

Now, Brookfield has replaced this offer with a binding proposal to acquire the Alto Sertão III Complex, as well as certain wind farms under development with a combined capacity of 1.1 GW.

Alto Sertão III (ASIII) is complex of 26 wind farms with a total installed capacity of 400 MW, located across several municipalities in Bahia, a northeastern state of Brazil. The complex contains 155 turbines. In December, Renova announced that it was 87% complete.

Following sales of its operating wind assets in 2017, the rest of Renova's wind projects that may be covered in this transaction are in development. The company has a 4.5 GW pipeline of wind projects located across north-east Brazil.

Brookfield has offered BRL650 million (US$200.7 million) for ASIII. The price may be increased by up to BRL150 million (US$46.3 million) related to the future generation of the ASIII Complex, to be verified after 5 years of operations, in addition to BRL187,000 (US$57,731.4) per MW of installed capacity of the other wind projects, which have not been disclosed.

Renova has stated that its management bodies are currently evaluating the proposal. If it is accepted, the company will grant Brookfield a new period of exclusivity of 30 days, automatically extendable for an additional 30 days, for completion of the transaction documents.

If it the purchase is approved, Renova will use the proceeds to pay suppliers and creditors of the Alto Sertão III project.