New Energy Solar to divest 325 MW of solar in USA
New Energy Solar will run a formal sale process for a part interest in two of its US solar plant assets, a 49% interest in Boulder City in Nevada and a 50% interest in Mount Signal 2 in California. The sale process has been initiated after receiving expressions of interest from third parties which represent an opportunity to realise value for securityholders.
The 200 MW Mount Siglan 2 project involves the development of a 200 MW solar facility in Imperial County, California. MS2 solar farm covers approximately 1,300 acres and generates enough electricity to power 69,400 homes, abating approximately 247,000 tonnes of carbon, the equivalent of removing 53,700 cars off the road. The project has a 20-year PPA with Southern Califronia Edison (SCE).
The 124.8 MW Boulder project involves the development of a solar farm located in Nevada. The facility uses 288,000 tracker-mounted panels manufactured by SunPower. It has an expected annual production of about 280 GWh. The project has a 20-year PPA with NV Energy.
Based on NEW’s statutory accounts as at 30 June 2019, the combined value of these two equity interests is approximately AUD126 million (US$85.6 million) or 23% of NEW’s total net asset value.
In the event interests in one or both Mount Signal 2 and Boulder are sold, use of the sale proceeds will include undertaking capital management initiatives, including an on-market buyback and paying down some shorter-term debt.
The current timetable for the sale process envisages the submission of binding bids by mid-January 2020. NEW will keep the market informed of progress and the anticipated use of funds. There is no guarantee a transaction will eventuate and any decision to sell assets will be dependent on it continuing to be in the best interest of securityholders and there being no material change in market conditions.
