Renewable energy group Kedco to buy Reforce
THE CORK-based renewable energy group Kedco, which operates a biomass electricity and heat generation plant in Newry, has agreed a deal to acquire Reforce Energy Limited.
Reforce, which was established just last year, is also an Irish company specialising in renewable energy development.
Kedco said it has signed a heads of agreement with Reforce to acquire its entire share capital in a share-only deal. The renewable energy group said if the deal is completed it would “not involve” a cash consideration but “would be satisfied by the issue of new Kedco ordinary shares”.
Reforce lists its focus as small scale renewable projects across various technologies.
According to Kedco the key markets which Reforce operates include the UK, Republic and Northern Ireland where it has “pipeline” of more than 60 projects in various stages of development. Reforce was founded by Steve Dalton and Tim O’Keeffe. One of the projects Mr Dalton worked on was Kedco’s Newry biomass plant which is a joint venture with its largest shareholder, Farmer Business Developments.
Electricity generated by the Newry biomass plant is being sold to Bord Gáis Éireann under a power-purchase agreement.
The company said once it is fully operational the plant will employ up to 12 people and be able to provide electricity to more than 7,000 homes.
Kedco has also received planning permission to build a £45 million biomass wood gasification plant in Enfield, north London.
Gerry Madden, chief executive of Kedco, said the proposed acquisition of Reforce Energy would further help it realise its ambition to “become one of the UK and Ireland’s largest independent renewable energy companies”.
The acquisition deal comes just days after Kedco unveiled a big restructuring proposal aimed at removing “€10.8 million of debt” from its balance sheet.
As part of the restructuring plans the company said it intended to dispose of its 80 per cent interest in SIA Vudlande, a Latvian company that produces wood and biomass products, to holders of zero coupon secured notes at €3 million.
It also said that certain lenders would write off 40 per cent of the interest owed by the company.
Kedco also announced last week that it wants to raise up to £2.5 million to help it meet ongoing working capital requirements including the development of its project pipeline.