(Adds further details, background)
By Jose Elías Rodríguez
LONDON/MADRID, June 24 Private equity firm KKR
is to buy a one-third stake in indebted Spanish group
Acciona's international wind farms arm for 417 million
euros ($567 million), the companies said on Tuesday, with a view
to listing the business next year.
Acciona and other Spanish renewable power generators have
shed assets over the last two years to cut debts after the
government made a U-turn in energy policy and slashed subsidies
for renewable power, a move that has particularly affected
profits at Acciona's Spanish wind farms, which are excluded from
the KKR deal.
The KKR purchase gives Acciona Energia International (AEI)
an enterprise value of 2.6 billion euros, with half that value
in equity and half in net debt, said the companies, with AEI's
operating assets amounting to 2.3 gigawatts of wind power
capacity across 14 countries including the United States, Italy
and South Africa.
Acciona said other funds had competed for the assets in a
deal handled by Lazard investment bank.
Once the deal closes late this year the companies intend to
launch a public share offer in the first half of 2015 for a
vehicle that will hold all or part of AEI's assets.
The public offer will be for a so-called yieldco vehicle,
similar to Abengoa Yield, the recently listed U.S.
subsidiary of another Spanish firm, Abengoa.
Yieldcos usually own and operate the generating assets of
their parent companies and have long-term output purchase
agreements with power utilities, thereby guaranteeing a stable
cash flow that can be paid out in dividends.
"The first half of next year is a realistic time frame (for
the share launch)... and in principle AIE will continue to be
the majority shareholder of the yieldco," Juan Muro Lara,
general director of corporate development for Acciona, told
reporters at a news conference on Tuesday.
KKR said it could put some of its other international
renewables assets into AEI.
"We haven't talked about the issue as part of this
transaction, but we don't rule it out if it makes sense," said
Jesus Olmos, head of KKR infrastructure in Europe and of KKR's
operation in Spain.
"The French assets, or the Canadian or U.S. assets could
become part of AEI, either for management or ownership," Olmos
said at the news conference.
Acciona said the KKR deal would reduce its own debt although
it could use the proceeds from the sale to invest in projects.
The company ended March with 5.9 billion euros in debt, down
from 6 billion euros at the end of 2013.
Acciona's earnings before interest, tax, depreciation and
amortisation dropped 19 percent in the first quarter of 2014 to
226 million euros, mainly due to the subsidy changes.
Shares in Acciona were up 3 percent at 66.79 euros by 1258
In a research note Spain's Sabadell bank said the deal was
positive strategically and would enable the division to grow,
although the implied enterprise value of 2.563 billion euros for
AEI was below its own estimate of 2.7 billion euros.
(Additional reporting by Freya Berry; Writing by Fiona Ortiz;
Editing by Mark Potter and Greg Mahlich)