Orrön Energy has entered into an agreement to sell its 50 percent interest in the Leikanger hydropower plant for an enterprise value of MNOK 613, approximately MEUR 53, to the existing partner Sognekraft Produksjon.
This transaction forms part of the Company’s strategy of having an opportunistic approach to value creation, and to take advantage of favourable market conditions as they arise. The sale of the Leikanger hydropower plant allows the Company to focus on accretive investment opportunities across its operating and greenfield businesses. The transaction has an effective date of 1 January 2024 on a debt and cash free basis. The transaction is subject to customary financing approvals for both Orrön Energy and Sognekraft and is expected to close within the second quarter of 2024.
The Company entered into an agreement to acquire a 50 percent interest in the company owning the Leikanger hydropower plant in 2019, and the asset formed part of the Company’s portfolio upon its transformation into a renewables company in July 2022. Following the transaction, Sognekraft will own 100 percent of the company owning the Leikanger hydropower plant.
Daniel Fitzgerald, CEO for Orrön Energy commented:
'This transaction is a perfect example of our opportunistic and entrepreneurial approach to value creation, and the sales price clearly demonstrates the underlying value of our assets and the discount in our share price. The Leikanger asset represents less than 10 percent of Orrön Energy’s annual power generation, however the value of this transaction represents approximately 20 percent of our enterprise value and 30 percent of our current market capitalisation. From inception we have been focused on project returns and this transaction allows us to recycle capital into projects and acquisitions with higher rates of return.'
Source: Orrön Energy
