Australian solar energy company New Energy Solar (NEW) has agreed to divest two of its renewable energy assets to Banpu Energy and its affiliates for A$288m ($223m).

As part of the deal, Banpu Energy and its affiliates will acquire the Beryl and Manildra solar farms, whose total capacities are 111MW and 56MW respectively.

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The proceeds from the divestiture will be used by NEW to repay group debt and reduce gearing below the long-term target of 50%, as well as buying back NEW securities.

Up to 50% of the net equity proceeds are expected to be allocated to the buyback.

Before transaction costs, the expected equity proceeds are A$62.5m ($48.5m) for Beryl and A$42.9m ($33.2m) for Manildra.

The net asset value of these solar farms on 31 December was $46.5m (A$60m) and $39.2m (A$50.5m) respectively.

In a statement, NEW said: “This sale is one of the initiatives undertaken by NEW to reduce the gap between its net asset value and its trading price following last year’s strategic review undertaken by RBC Capital Markets.

“NEW is now well progressed on these initiatives given the sale of a 25% interest in NEW’s largest plant, Mount Signal II, in California at the end of last year, the granting of an option to US Solar plc to acquire a further 25% interest in Mount Signal II, and the sale announced today.”

The deal’s completion is subject to customary consents and approvals, including Foreign Investment Review Board (FIRB) approval, and is expected to take place within the next two months.

With this divestiture, NEW will also exit the Australian renewable energy market.

Once the deal is complete, all the company’s remaining energy assets will be located in the US.