TerniEnergia signs agreement for the sale of 22 solar projects in Italy

TerniEnergia and Italia T1 Roncolo S.r.l., in partnership with the sponsor LCF Alliance, have reached an agreement for the sale by TerniEnergia, also through some subsidiaries and SPV, of 22 photovoltaic plants in Italy with a total installed capacity of 19.3 MW.

TerniEnergia will continue to manage the O&M activities of the plants involved in the deal for a period of three years.

The agreement provides for the closing of the sale of the assets by 30 November 2019.

The purchase price for 100% of the plants sold is equal to EUR23.875 million (US$26.6 million), corresponding to the equity value determined at the reference date of 30 June 2018, with the exception of some adjustments that may derive from the evolution of the net working capital between that date and the closing date.

A consideration of approximately EUR0.5 million (US$0.5 million) (corresponding to 50% of the equity value of no. 1 Joint Venture) will be paid to the shareholder of the vehicle company owning no. 2 plants. In addition, approximately EUR4.5 million (US$5 million) will be paid to the 2 JVs owning 3 plants for the transfer of the business unit to 2 Newco.

The agreement requires that the closing of the asset sale is subject to the establishment of a certain number of Newco, which will incorporate part of the asset portfolio consisting of a total of 19 plants, of which:

• 16 plants owned by Energia Alternativa S.r.l., Terni Solarenergy S.r.l., Girasole S.r.l., Sol Tarenti S.r.l. and Solter S.r.l. (3 plants of which held by the JV);
• and 3 plants directly owned by TerniEnergia SpA.

The transaction also involves the assumption by the purchasers of financial debts linked to the plants for approximately EUR43.3 million (US$48 million), of which EUR6.8 million (US$7.6 million) related to the plants held in Joint Ventures at 50% with other partners. Part of the purchase price, equal to EUR2.5 million (US$2.8 million), will be maintained in an Escrow account as a guarantee of Seller’s obligations and indemnification obligations, and issued upon fulfillment of certain conditions expressly established by the parties.

The closing of the transaction is subject, among other conditions, to obtaining (if necessary) the consent of credit institutions, in the form of waivers, the sale of photovoltaic assets and other conditions of a technical and financial nature, typical of this type of transaction.

TerniEnergia was assisted by Grimaldi Studio Legale, as legal advisor, and by EnVent Capital Markets as financial advisor. Italia T1 Roncolo S.r.l. and LCF Alliance were assisted by Rödl & Partner as legal advisor.