Innergex Renewable Energy has reached an agreement to divest its subsidiary Magma Energy Sweden to a managed European infrastructure fund for $304.8m. Magma Energy Sweden owns an equity interest of around 53.9% in HS Orka
Innergex CEO and president Michel Letellier said: “This transaction is highly strategic and will create significant value for Innergex as it allows us to focus on our core markets, reimburse our one-year credit facility, deleverage our corporate credit facilities and reduce our exposure to foreign exchange.
“Given Innergex’s non-operatorship role in HS Orka, we viewed the sale of this non-core asset to be consistent with our long-term strategy of developing, owning and operating high-quality renewable energy assets in our core markets and competencies.”
HS Orka owns Reykjanes and Svartsengi geothermal facilities, which have a combined capacity of 174MW; the 10MW Brúarvirkjun hydro project, which is currently under construction; and a 30% equity interest in the Blue Lagoon Geothermal Spa and Resort in Iceland.
The company plans to use part of the proceeds from the divestment to reimburse the C$228m one-year credit facility contracted last October.
This credit facility was taken during the time of the acquisition of the remaining stake in the Cartier wind farms and operating entities.
The firm will also use the proceeds to deleverage corporate facilities and for general corporate purposes.
The deal is subject to third party consents and other closing conditions. It is expected to be completed after the conditions are met in the second quarter of 2019.