Enel Green Power S.p.A. (EGP) and F2i SGR S.p.A. (F2i), acting on behalf of F2i – Fondo italiano per le infrastrutture, together with their respective subsidiaries Enel Green Power Solar Energy S.r.l. and F2i Energie Rinnovabili S.r.l., have announced an agreement to form an equal joint venture.
Under the agreement, EGP will form a new company, to which it will contribute, through its subsidiary Altomonte FV S.r.l., 105 MW of PV assets. F2i will in turn contribute an additional 105 MW of PV assets currently held by F2i Solare 1 S.r.l. and F2i Solare 3 S.r.l., subsidiaries of F2i Energie Rinnovabili S.r.l.
The enterprise value of the EGP assets is €230 million, while that of the F2i assets is €285 million. The equity value of EGP assets is €88 million net of minorities, while that of the F2i assets is €106 million. In order to guarantee equal shareholdings in the joint venture, EGP will also make an €18 million cash contribution at the time of the transfer of Altomonte FV S.r.l.’s investment.
The value adjustment standard for this kind of transaction is expected to be carried out in 2016.
The joint venture aims to take advantage of the consolidation currently under way in the Italian PV market by bringing together operating PV solar plants owned by different financial institutions and private operators.
Enel Green Power plans to use the joint venture to create value by:
EGP has an option to acquire an additional 2.5% of the joint venture, which would give it control. The agreement also gives F2i the possibility of contributing by 2016 an additional 58 MW of capacity, with EGP making an additional cash injection to maintain the two partners’ equal stakes in the joint venture.
The transaction, which is expected to close by the end of 2015, is subject to the approval of the EU antitrust authority and other standard conditions precedent. Following the closing, EGP will benefit from a positive impact on its net financial debt of €121 million.