(Montreal) Quebec renewable energy producer Innergex is on track to raise more than $400 million in cash, sums that will give it greater leeway to finance other projects, says its president and chief executive officer. management, Michel Letellier, in an interview.
Less than a year after becoming the sole owner of its 16 wind farms in France, Innergex announced on Monday that it was selling a 30% stake in its French operations to insurer Crédit Agricole for an amount equivalent to 188 ,4 million. Both companies expect the transaction to close in the second half of the year.
Other transactions will come to fill the coffers of the company. Management intends to remortgage certain debt-free assets in order to obtain more liquidity. These transactions will “exceed” the 400 million in new available cash. “It will allow us to generate a fair amount of cash that will ultimately be used for the future development of Innergex,” comments Mr. Letellier.
“We’ve got quite a bit (of cash),” he continues. We hope that we will have a lot of success in the calls for tenders, so that will allow us to finance all the development of the sector here in North America. »
The company thus contracted debt on two hydroelectric power stations in British Columbia as well as on the Gilles-Lefrancois power station in the Quebec region. It is also negotiating with Hydro-Québec to refinance its three Portneuf power stations.
When first-quarter results were released in May, experts said Innergex had little financial leeway to seize new opportunities, even though the company was not considered financially distressed at $272 million. cash available.
The company intervened “quickly” to allay those fears, argues Letellier. In addition to these transactions, he highlights the securing of US$534 million in construction financing for the Boswell Springs project in Wyoming, announced in July. “I think that will reassure the market. »
By selling a stake in Crédit Agricole, Innergex is joining forces with a well-established partner in France with whom to share the costs of these upcoming projects in the country of Emmanuel Macron, explains Mr. Letellier.
The leader compares Crédit Agricole to Desjardins Group in Quebec, because the insurer is “very present in the region”. This expertise could be useful for the possible development of wind farms in partnership with French municipalities.
For Crédit Agricole, the transaction is part of the objective of increasing its investments in renewable energies, explained its managing director, Philippe Dumont, in a press release. The insurer aims to reach an installed capacity of 14 gigawatts (GW) by 2025.
European Union member states, including France, want 40% of their energy mix to come from renewable sources. “I think that France definitely has a desire to have more and more projects that are implemented at the solar and wind level,” enthuses Mr. Letellier.
Last fall, Innergex bought a 30% stake in its assets in France for 96.4 million. The company thus became the sole owner of its activities in France. A year later, Innergex obtains 188.4 million for a 30% stake.
The company didn’t sell for twice the price, Mr. Letellier said. Last fall’s transaction only included wind farms in operation, while Crédit Agricole also bought a stake in projects under development. The price difference includes the value assigned to expected future growth.
The price obtained by Innergex is attractive, said analyst Nelson Ng of RBC Capital Markets. “It implies a good increase in valuation since the buyout and provides more liquidity to the company. »
The company will provide an update on its balance sheet and financial results Tuesday after markets close as part of its second-quarter earnings release.
Analysts expect revenue to rise 20% to 264.6 million and diluted adjusted earnings per share of 47 cents, compared to a loss of 4 cents in the same period last year, according to the data firm. Financial Refinitiv.
The Toronto Stock Exchange, where Innergex shares are listed, was closed on Monday due to the civic holiday outside Quebec.