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Nordex and RWE Agree Mega Deal for Project Business

Hamburg, Germany - The wind turbine manufacturer Nordex announced that the company is using the current market environment, which is characterized by strong investor interest in renewable energy development projects, to sell its renewable European project pipeline to the energy group RWE.

This involves projects with a capacity of 2,700 megawatts (MW) in France, Spain, Sweden and Poland. Nordex expects the deal to strengthen the company's balance sheet, whose CEO is optimistic about its future performance in view of its strong order book and good market prospects for Nordex technology.

Purchase price of around EUR 400 million - Significantly strengthening Nordex's capital structure

As part of its value chain, the Nordex Group develops its own portfolio of wind farm projects in some markets. These projects are then resold to customers or investors. Nordex and RWE have agreed to sell this business to the German utility. This is still subject to the usual transactional reservations. Following the sale of the portfolio, Nordex plans to continue project development in other markets.

In total, the planned transaction comprises Nordex's own projects with a volume of 2,700 megawatts (MW). At around 1,800 MW, the focus is on wind power projects at various stages of development in France. The portfolio in France also comprises PV projects with a volume of 100 MW. The Nordex Group as the potential seller and RWE have signed a corresponding agreement on a put option. The purchase price is around EUR 402.5 million.

The Development segment comprises a team of over 70 employees with extensive experience in this area. Once the transaction has been completed, the employees, most of whom are based in France, are to be integrated into the subsidiary RWE Renewables in order to develop further projects there. With the planned acquisition, RWE is expanding its strategic project pipeline and adding to its existing development pipeline of 22,000 MW.

"The quality of the underlying assets and our consistent development track record have resulted in a strong interest for our project development pipeline from multiple market participants crystallising an excellent outcome for Nordex," says José Luis Blanco, CEO of the Nordex Group, regarding this important milestone. "Significant proceeds from this transaction would strengthen our balance sheet as we continue to build on our strong order book and capture market opportunities with our Delta 4000 product portfolio," Blanco continued.

Before the transaction can be closed, a customary consultation process with the staff council in France is to be conducted. Closing of the transaction would further require foreign investment clearances of the competent authorities in France and completion of customary spin-off processes, as required for the transaction. It is expected that closing could occur in Q4 2020. Rothschild & Co. acted as exclusive financial advisor to the Nordex Group.

RWE on course for growth with renewables

The energy group RWE is pressing ahead with its growth strategy as one of the world's leading renewable energy companies. Starting in fiscal 2020, RWE's financial reporting will be aligned with the company's new strategic focus. In future, RWE will therefore report on its business performance using a new structure comprising the four segments of its core business:

  • Offshore Wind
  • Onshore Wind/Solar
  • water/biomass/gas and
  • Energy trading.
The fifth segment, coal/nuclear energy, is also included.

The Offshore Wind segment comprises all offshore wind turbines worldwide. According to RWE, the division is expected to achieve adjusted EBITDA of between €0.9 billion and €1.1 billion in the current year 2020. The pro forma result for the full year 2019 was €961 million. The second core area (Onshore Wind & Solar) includes all wind and solar power plants in North America, Europe and the Asia-Pacific region. Adjusted EBITDA of between EUR 500 and 600 million is expected for the segment. Pro forma it was €442 million in 2019. The increase is mainly due to the addition of new capacities. In the Water, Biomass/Gas segment, RWE expects adjusted EBITDA to be between €550 million and €650 million (pro forma earnings in 2019: €671 million).



Source: IWR Online, Aug 08 2020