Airtricity North America to be sold for $1.4bn

Irish wind energy group Airtricity has agreed to sell its operations in the US and Canada to German giant Eon in a deal valued at $1.4 billion (€1 billion).

Airtricity will concentrate on developing its European business when it has completed the sale, which is set to go through by the end of the year.

The Irish group has spent €300 million so far on building up Airtricity North America, which has interests in Texas, the northeastern US and Canada.

Under the deal's terms, Eon will take on Airtricity North America's debts.

This will result in the Irish parent getting €800 million cash, consisting of a payment of €600 million and the repayment of a €200 million inter-company loan.

Eon's statement yesterday said that the purchase price included "$553 million (€391 million) net debt and shareholder loans".

An Airtricity spokesman said the sale proceeds would be ploughed back into the company.

Airtricity is focusing its development efforts on its European operations, which are spread through Ireland, Britain, Germany, Benelux and Iberia.

It has been known for some time that the company has been seeking to raise more cash and was looking at the options available to it.

It is understood that Airtricity's backers, including Irish utility NTR, which holds 51 per cent of the group's voting shares, ultimately came down in favour of selling its American business.

The US operations consist of 210 megawatts (mw) of installed generating capacity, and a further 880mw, which is due to come on stream next year. Alongside this the business has projects with over 6,000mw in various stages of development.

Eon said yesterday that it will have to spend €2.5 billion developing these facilities over the next four years.

Airtricity's long-time banker, Credit Suisse, acted as financial adviser on the deal, as it did on last year's sale of a stake in the group to specialist fund, Ecofin.

Former Bord na Móna chief executive Eddie O'Connor founded Airtricity in 1999. Soon afterwards, the company set about building the Republic's biggest onshore wind farm - a facility that uses turbines to convert wind to electricity - at King's Mountain in Sligo.

The farm has the capacity to generate 25mw of electricity, which according to Airtricity's own calculations, is enough to supply close to 14,000 homes.

As the wind does not blow constantly, these facilities operate about 35 per cent of the time.

Commenting on the US deal yesterday, Mr O'Connor said that Eon had made a significant commitment to investing in renewable energy.

He added that Airtricity would "work closely with Eon during the completion stage of this transaction".

Eon is based in Düsseldorf and is one of Europe's biggest power and utility companies. It has a market capitalisation of €83 billion and last year had sales of around €68 billion.

It is also a major wind farm operator with facilities in the UK, Germany, the Nordic region and the Iberian peninsula.

Lutz Feldman, the executive responsible for its renewable energy business, described the Airtricity deal as a further step towards establishing a leading international position in the industry.