The fund management firm Everwood Capital has hired PwC as financial advisor and the firm Garrigues for the legal side of things in order to execute the sale of its first three renewable asset portfolios, according to industry sources.
Namely, Everwood Renewables Fund I, II, III. These funds have a total of 18 solar PV plants, acquired since 2016, spread throughout southern Spain with a total installed power of 25 megawatts which enjoy a return on investment (state premium). In short, market sources value the total of these assets at over 150 million euros.
At present, Everwood Capital, whose senior advisor is Nemesio Fernández Cuesta (ex Repsol and ex Isolux), already has three interested parties on the table who are in phase two of the process. It is expected that by the end of this month, the binding offers will be completed. The interested parties are both Spanish and foreign.
The process, which has been ongoing for several weeks now, has received increasing interest, especially after the new path of ultra-low interest rates marked by the world’s main central banks, which makes these types of funds attractive investment alternatives due to their return. In relation to the three funds to be sold, the first has already recovered two thirds of its investment for its investors via revenues and refinancing. The second fund has already recovered 40% of the paid-in capital. The placement of these funds was carried out by Andbank, one of the private banks that is most committed to alternative investments, such as the renewable energy ones now being sold.
The clearest regulatory scenario
The new regulatory outlook for renewables is accelerating transactions in the sector. After the sale of Oaktree’s stake in Eolia, revealed by El Confidencial, and that of KKR in X-Elio, Cerberus has now hired PwC to sell the solar part of Renovalia, according to ‘El Economista’. This comes in addition to other transactions such as the one currently underway by Everwood Capital. Since the arrival of the Socialist Party PSOE to the government, energy officials have advocated maintaining the reasonable rate of return enjoyed by these plants. A much more stable position than with the previous Executive, predisposed to reduce their return drastically.
Moreover, the current Executive drafted a bill at the end of last year in which it was intended to maintain this return at the current 7.39% until 2031, with the aim of giving the sector legal certainty and moving away from the scourge of arbitrations against Spain due to the cuts in these subsidies implemented first by Zapatero’s government and later, and more significantly, by Rajoy’s. This proposal also has the approval of the main opposition parties. The cut proposed by the CNMC in 2018 is minimal, leaving the reasonable return of renewable energy plants under the specific regime at 7.09%. With this outlook, many of the transactions that were still to materialise can now be executed.
Everwood Capital is a Spanish investment fund management firm regulated by the CNMC. It has more than 200 million euros in assets under management in the renewable energy, venture capital and real estate sectors. It was founded by Alfredo Fernández Agras, one of the most renowned investment bankers in Spain. Ex UBS, ex Merrill Lynch and ex Morgan Stanley. Also founder of the same project is José Antonio Urquizu, who was Executive Director for investments in Spain at Goldman Sachs Special Situations London. The third founding partner is Pedro Ruiz de Marcos, another executive director with experience in the field of venture capital and investment banking.
In addition to the three funds it is selling, the firm raised over 90 million euros in a first deal for a fourth fund that aims to develop new solar PV plants that will obtain their revenues under market conditions. They currently have commitments totalling 150 million euros and aim to reach 300 million euros in order to build up to 1,000 MW in solar PV parks. For this purpose, they have already hired Gransolar, the firm that is building its first 50 MW park in Zaragoza.