SWS to expand windfarms in €400m funding round

Bandon-based group SWS has finalised plans to raise up to €400 million in debt and equity to finance acquisitions and seed projects ahead of a possible flotation or trade sale in 2007 or 2008.

The money to be raised in the "internal funding round" is at the lower end of expectations as the group indicated last April it might seek as much as €500 million to fund its expansion.

As SWS opened a €60 million windfarm yesterday at Kilgarvan in Co Kerry, it said the new business plan now in place would see it spend €300 million of the new money on wind energy.

Tim Cowhig, general manager of the energy division at SWS, said the group planned to raise €325 million in debt finance from a syndicate of banks. It also planned to raise €75 million in three tranches of €25 million from shareholders.

Management owns 20 per cent of SWS, with the remainder held by Dairygold and Bandon, Barryroe, Drinagh and Lisavaird co-operatives.

"The first round of the equity should be in place by the end of the end of the year," said Mr Cowhig. "We'll be raising it all over 18-24 months."

The ultimate aim of the group was to position itself to make a big strategic initiative in the next three years, he said. The choices at that stage might include a trade sale, stock market listing or a further funding round.

SWS started as a cattle-breeding company but in recent years diversified into waste, energy and outsourcing. The group is moving alone after a merger with the Irish Agricultural Wholesale Society, now One51, was called off last year, following almost two years of talks.

The 15-turbine 45-megawatt windfarm at Kilgarvan ranks among the largest in the State. The development follows the opening of SWS windfarm projects last year at Booltiagh in Co Clare (€25.3 million) and at Gneeves near Millstreet in Co Cork (€12 million).

In advance of the new funding round, the group already plans windfarms in Co Cork, Limerick and in the North. It also has a project in Hungary. Outside the wind sector, SWS is examining possible acquisition targets in combined heat and power (CHP) industry and in biomass energy production.

Turnover at SWS grew by 29 per cent to €30.7 million in 2005 and shareholders' funds rose by 21 per cent to €25.1 million at the end of the year.

Plans have been lodged with Clare County Council for a €10 million windfarm by Cork-based company, DP Energy.

The planned six-turbine windfarm is an extension to a windfarm that became operational last year.