Wednesday 29 April 2009

Debt blowout for wind farm group

Australian
Monday 27/4/2009 Page: 25

Viridis Clean Energy Group, which owns a suite of windfarms in Britain and Germany and landfill gas installations in Britain and the US, has scrapped its dividend payments and flagged a possible equity raising or the sale of the European wind assets as it seeks to reduce its debt to more manageable levels.

Viridis Clean Energy negotiated a refinancing of its $85 million corporate debt facility with Investec and ABN Amro in February, but could only extend it till July 31, 2010, and doubts if it will be able to reach acceptable terms at current debt levels. It has reduced its debt to $62 million after using funds released through the refinancing of a windfarm in Scotland but wants to cut its debts to as low as $20 million to put itself in a position to negotiate a satisfactory long-term facility.

The fund, which raised $126 million in an IPO priced at $1 a security in August 2005, said an equity raising or the sale of the European wind assets were two options. Its earnings have been affected by poor wind conditions in Germany and low energy prices for its landfill gas operations in the US. The announcement was not received well by investors, who pushed its securities down by a third to a record low of 21.5c.

Viridis Clean Energy is also following other listed infrastructure funds by buying out the external management agreement. It will pay a maximum $5.6 million in stock to Viridis Clean Energy Energy Capital, an entity whose main shareholders include Investec, a major sponsor of the Viridis Clean Energy float as well as a lender, and Walter Pahor, the founder and former CEO of Energy Developments. Viridis Clean Energy senior management are also former Energy Development executives.

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