Covid complications push Mainstream sale into next year

The deal had been expected to be completed by the end of 2020

The planned sale of Mainstream Renewable Power, the wind and solar energy group founded by Eddie O’Connor that focuses on emerging markets, is set to drift into early next year as Covid-19 has made it more complicated to close deals involving assets across a number of countries.

The company previously said it was set to secure an “equity partner”, a process that has attracted a number of takeover bids, by the end of this year. Industry sources had put a value of as much as €1 billion on the business earlier this year.

"Earlier this year Mainstream mandated Rothschild & Co to independently assess and validate the company's business portfolio with a view to finding an equity partner who shares Mainstream's vision, values and sense of mission," a spokesman for the company said.

“This process has continued at pace through the year despite the ongoing impacts of the Covid-19 pandemic and Mainstream now expects it to be completed in quarter-one 2021,” he said.

Major expansion

Mainstream, set up by Mr O'Connor in 2008 after the sale of the Airtricity business he had developed, is undergoing a period of major expansion across Latin America, Asia Pacific and Africa as well as in the offshore wind sector globally.

It has about 1.9 gigawatts (GW) of projects in construction or pre-construction across Chile, Egypt, Senegal and South Africa – the equivalent of about a quarter of peak demand for electricity in the Irish market.

While Mainstream said it had a “fully funded three-year business plan”, it is seeking an equity partner to accelerate and expand its existing build-out programme.

It has an additional development pipeline of almost 10GW of projects at various stages in countries including Vietnam, the Philippines, Australia and Colombia.

The investor search has flushed out bid interest from a number of overseas utility groups, as well as sovereign wealth and private equity funds for the entire group.

Mr O’Connor owns 55 per cent of the business and is its chairman. Management and a group of high net worth individuals, most of whom first invested in 2008, hold the balance.

The company posted a net profit of €19.4 million last year. That was down from €487.5 million for 2018, which had been driven by the sale of a Scottish offshore wind farm project to French utilities giant EDF in a deal worth up to €650 million.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times