Eddie O’Connor’s Mainstream may raise up to €300m

Renewable energy entrepreneur Eddie O'Connor is open to raising a multiple of the €100 million his company Mainstream is seeking from new investors, even if it results in ceding a majority stake in the business.

The eight-year-old company's medium-term fundraising needs have soared after landing a contract last week to build and run $1.65 billion (€1.46bn) of wind and solar plants in Chile, Mr O'Connor told The Irish Times.

“We’ve said that €100 million is the minimum, which we’d have absolutely no problem raising,” Mr O’Connor said. “If somebody came in with €200 million or €300 million, you’d be inclined to say, why not? You’d have to look at it very seriously. It all depends on the price.”

Mr O'Connor said he is not against handing over a controlling stake to new investors, as long as the shareholder agreement allows Mainstream to continue its strategy. He noted that infrastructure conglomerate NTR held a 51 per cent stake in Airtricity, the wind-farm company Mr O'Connor founded two decades ago, before it was sold in 2008 to Scottish & Southern Energy, now SSE.

“We’re open to all reasonable propositions,” he said.

Profit of €96m

Mainstream hired US investment bank PJT Partners earlier this year to raise at least €100 million of equity from one or more investors, after the company swung into a €96 million net profit last year from a €46.6 million loss in 2014. It is understood that the field has been narrowed to about a handful or potential investors, including infrastructure funds, pension and other investment funds. However, the Chilean contract may prompt fresh interest.

Mr O’Connor declined to comment on the stage of the fundraising, other than to say that he’s “looking for a quick solution . . . definitely by Christmas”.

“We set up the company at the most difficult time, in 2008, when the financial system was in meltdown,” said Mr O’Connor. “You couldn’t raise money and we had to sell projects far too early. It was really tough. Now we’re out the far side.”

Last month, the Dublin-based company, which is focused on energy projects in emerging markets, completed a $117.5 million stake sale in its main South African venture to a group of investors, including the Rockefeller Brothers Fund and International Finance Corporation, a part of the World Bank.

Mr O’Connor said fundraising for the Chilean project will likely be carried out at “platform level”, similar to the African venture, which is below corporate, or holding company, level. However, the amount of equity raised in the group will be instrumental in future decisions about how the platform will be financed.

The 69-year-old businessman said the company also plans to set up a financing division, called Mainstream Capital, for the group and its projects.

Central to the current fundraising is creating “liquidity” for the company’s long-standing investors by initially opening a grey market for trading in Mainstream stock, he said. The company is also targeting an initial public offering, most likely to take place in 2018 in New York.

“We’re looking at some kind of big liquidity event,” he said. “Either a flotation – or someone might come in with an offer you can’t refuse.”

But he said the company has not had any takeover offers as part the current process.