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Power NI could go up for sale as part of £1bn deal

By John Mulligan

Published 29/09/2015

Electricity is big business north and south of the border
Electricity is big business north and south of the border

Electricity supply firm Power NI could soon be on the market as overall owner Arcapita — parent company of Viridian — plots a sale of its Irish business in a deal worth around £1bn.

Arcapita, a private equity group whose interests extend across a range of asset classes, has reportedly been sounding out advisors to line the Viridian energy arm up for a trade sale. In Northern Ireland, Viridian owns Power NI, where it supplies electricity to about 610,000 homes and businesses.

In the Republic, Viridian owns Energia, which supplies electricity to the domestic and commercial market. Energia also supplies business customers in Northern Ireland.

According to Viridian's latest annual report, Energia had 61,300 commercial customers at the end of March, most of them for electricity. It had 56,000 domestic customers, with 26,000 of those buying both electricity and gas from the company.

Energia's revenue fell to £893.5m in the last financial year from £1.01bn, while pre-exceptional earnings before interest, tax, depreciation and amortisation (EBITDA) fell to £65.1m from £70.8m.

Energia also owns two power plants in north Dublin.

On a group basis, Viridian generated revenue of £1.46bn in its last financial year, compared to £1.6bn a year earlier. Group pro-forma operating profit was unchanged at £77.1m.

Industry journal Sparkspread, which first reported the planned sale, said that Arcapita ran a beauty parade of potential advisers this month.

A spokesman for Viridian declined to comment.

Last year, Arcapita, which bought then publicly-listed Viridian in 2006 for £1.6bn, had talks with JP Morgan about a possible stock market flotation of the energy business.

In 2010, Viridian sold its Northern Ireland electricity transmission and distribution business to the ESB for £1.2bn. That business last week announced it was renaming itself NIE Networks.

Arcapita filed for bankruptcy protection in 2012 in the United States as it sought to reorganise its finances. It had failed to refinance a $1.1bn (£0.7bn) loan that was about to fall due.

The Viridian group had managed to refinance its own balance sheet, receiving a €120m cash injection from Arcapita days before the bankruptcy protection was sought. This year, Credit Suisse and Deutsche Bank led a €600m (£444m) bond offering for Viridian that helped to cut the power firm's borrowing costs.

Arcapita previously tried to sell Viridian during the economic downturn.

In 2008, Arcapita had hoped to fetch between £1.7bn and £2bn for the firm after buying it for £2.2bn in 2006.

Earlier this year, Energia Renewables received a €125m (£92.4m) loan from Nord/LB to fund the construction of a 95 MW wind farm project in Co Donegal.

Belfast Telegraph

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