http://www.newenergyworldnetwork.com/renewable-energy-news/by-technology/wind/renewable-energy-holdings-sells-german-wind-assets-for-e40m.html

Renewable Energy Holdings has entered into an agreement to sell its interests in two wind projects to Allianz Renewable Energy Management in order to raise capital to develop its other portfolio projects.

The company has committed to sell the Windpark Kesfeld Heckhuscheid and Windpark Kir wind projects based in Germany for a total consideration of around €39.8m, with a deferred consideration of up to €2m.
The company said the deal is expected to close by the end of this month. On the date the disposal closes, Renewable Energy Holdings said it will provide two performance bonds totalling €1m for the two-year period following closing.
These bonds include €650,000 to serve as security for all warranty claims and other breaches of the sale agreement. The company has agreed to provide another €350,000 to serve as security for an indemnity it granted to Allianz with regards to energy losses resulting from restrictions imposed on the projects by planning regulations in Germany.
These restrictions relate to breaches of noise levels stipulated in the relevant permits, the company said.
Renewable Energy Holdings said €30.4m of the initial consideration will be used to pay down its existing debt and the company’s board said that at present it intends that the majority of the remaining proceeds will be re-invested in its Kobylany Wind Farm Project in Poland.
It also said the disposal is expected to free up about €1.2m of working capital held within the company to fund its remaining businesses.
Renewable Energy Holdings funded the acquisition of the German Wind Assets and development of their businesses via debt facilities which it said assumed higher wind speeds than those currently being achieved.
The company’s board said the intention is to focus on the Kobylany wind project in Poland and Mynnydd y Gwynt in Wales going forward, due to the potentially superior economic returns they provide.
It said the company has considered a number of options that will give it the scale and scope to progress these projects and other similar opportunities.
During fiscal 2009, the company said the German wind assets collectively made a segment loss before tax of £840,000 on a turnover of £4.5m. The audited net assets of the assets at the end of fiscal 2009 totalled £12.95m, it said.
Renewable Energy Holdings said it extended the development timeline for the Kobylany wind project due to weak capital markets that resulted in the restriction of funding in the region to small growth businesses.
In December 2009, the company completed the sale of CETO to Carnegie in exchange for more than 232.6 million ordinary shares in Carnegie, and disposed of its Bryn Posteg landfill gas operation in Wales in February 2010 for up to £2.75m.