Vortex Energy sells a controlling stake in its 365MW UK Solar Portfolio to TNB valuing the portfolio at c. GBP 500m
(London, United Kingdom) — Vortex Energy, a global renewable energy platform managed by Beaufort Investments S.ar.l (“Beaufort”), a subsidiary of the private equity arm of EFG Hermes, has completed the sale of its controlling and managing stake in Vortex Solar (“Vortex III”), a 365MW solar PV portfolio, acquired in 2017 from TerraForm Power, at an enterprise value of c. GBP 500m.
The stake was sold to TNB International Sdn Bhd, a wholly owned subsidiary of Tenaga Nasional Berhad (“TNB”), an existing shareholder in the business and one of South East Asia’s largest utilities with an installed capacity of c.15GWs globally. Vortex III is one of the largest standalone portfolios in the UK, with an average asset age of 6 years, PPAs with major European energy companies and utilities, an attractive ROC regime and a long-term debt package from major lenders including Santander, RBS and ING. The portfolio achieved an EBITDA of c.GBP 39mn in 2019 with an 84% EBITDA margin, exceeding its budget and providing attractive cash yields to its shareholders. It continues to meet its targets in 2020, despite the global challenges.
Karim Moussa, Head of Private Equity and Asset Management, at EFG Hermes said, “This is a major milestone for Vortex. The exit of Vortex III delivered a 1.5x cash on cash multiple to our investors and an IRR of c. 14%. We continue to demonstrate our ability to pursue the full cycle of raising capital, investing strategically and exiting major renewable energy portfolios. Since launching Vortex in 2015, we have combined net 822MW of premium assets while investing more than EUR 1.3bn in the sector in developed markets. We have been consistently delivering attractive returns to our shareholders and partners by aggregating and enhancing assets and then selling portfolios to strategic long-term owners of renewable energy assets. This is the second major exit following the disposal of our 49% stake in a 1GW wind portfolio to funds managed by J.P. Morgan last year.”
Bakr Abdel-Wahab, Head of Energy, at EFG Hermes Private Equity said, “This transaction demonstrates Beaufort’s skills as a leading investment and asset manager of large scale portfolios and businesses. Since acquiring the UK assets, we have improved their performance and capital structure via a major refinancing; revamping all key portfolio agreements, partnering with Lightsource BP and establishing a strong London based asset management team. This active management strategy has generally enabled us to return to our investor across our three Vortex Energy platforms since inception, a net average annual cash yield of 5%, cash-on-cash multiple of 1.4x and IRR of 13%. We look forward to continue growing Vortex Energy’s footprint and investing in energy transition businesses and portfolios globally over the coming period.”
The Beaufort team is currently planning to establish Vortex IV, a renewable energy platform that will target global generation, storage, distribution and technology businesses. Moussa concluded, “We are excited about future global opportunities in renewables and the wider clean energy space, we shall aim to commence our fundraising efforts by the end of 2020, with anchor investors already showing increased interest in our next endeavor Vortex IV.”