ERG, through its subsidiary ERG Power Generation, has agreed to sell its Italian thermoelectric power plant, to Swiss investment holding company Achernar Assets, for a total of €205.5m.
Under the terms of the deal, Achernar will buy entire share capital of ERG Power, which owns the Combined Cycle cogeneration plant Gas Turbine (CCGT) power plant in Priolo Gargallo.
The consideration in terms of Enterprise Value is equal to €191.5m, including working capital items and tax credits totalling €88.5m, expected to be cashed in between signing and closing.
The agreement also includes earn-outs related to the performance of the business in 2024 and 2025, along with tax-related items totalling around €14m.
The closing of the transaction is expected by the end of this year, subject to the successful completion of the golden power procedure at the Italian Prime Minister’s Office.
ERG chief executive officer Paolo Merli said: “The divestment of ERG Power allows us to complete our transformation to a business model entirely focused on wind and solar power generation: a crucial step towards achieving the ‘net zero’ target that the Group has committed to and set as part of the ESG plan.
“We are satisfied of the valuation of the plant in line with the Business Plan forecasts and the 2023 net debt guidance disclosed to the market.
“The strong interest, reliability and commitment shown by the buyer, who is intentioned to value the skills and know-how of the people employed in the Plant at their best for the company’s future growth and development, have been for ERG a key evaluation aspect for guaranteeing the development of the plant.”
Achernar Assets operates primarily in the energy, medical technology, infrastructure, and financial services sectors.
The natural gas-fired power plant, with an installed capacity of 480MW, produces around 2.4TWh per annum of electricity and 1.2 million tonnes of steam.
It primarily serves the Priolo industrial area, through long-term contracts.
The sale includes around one hundred and forty-four people, specialised plant operation technicians, energy management experts and dedicated staff at the plant.
Rothschild & Co. served as financial advisors, while DLA Piper served as legal advisor and Ernst & Young as accounting and tax advisor on this transaction.
