The JV portfolio will start with an initial purchase of Novera’s UK based landfill gas assets at a price between $65 million and $75 million. Following completion of the deal Novera will focus on project development of sustainable energy assets including the Mynydd Clogau wind farm and operation of the Biomass Services business.
"New operating assets, including Mynydd Clogau, may be acquired by the entity subject to meeting specific performance hurdles," the group added.
Chairman of the group Dr Don Stammer said the company’s directors believe the joint venture with Macquarie will provide a better outcome for shareholders than the proposed IPO of Novera’s UK operations.
"The proposed restructuring and re-financing of Novera that would occur if the proposal is implemented with Macquarie Bank will avoid any immediate dilution of shareholders holdings, as would have occurred under the proposed IPO," Stammer said.
Novera recently reported a 16% sales growth for the first half of the year despite an overall operating result of a $600,000 loss, due mainly to costs from the Australian operations which are currently being restructured.
“The group’s UK subsidiary, Novera Energy Europe, generated an EBITDA of $3.7m and a profit of $0.3m for the half year. The modest result was due to gas restrictions at the Arpley facility, which was sold in June, and one-off costs associated with our planned capital raising,” Stammer said.
The UK Landfill Gas division generated revenues of $12.6m and a profit of $2.6m. The gross margin for the division increased to 55%, driven by improving operational efficiencies and rising Renewable Obligation Certificate (ROC) pricing in the UK.
The UK Biomass Services business increased revenues to $2.1m and profit to $0.2m, after commencing new operations and maintenance contracts in Scotland.
“The addition of the Mynydd Clogau wind farm is expected to contribute annual revenues of approximately $5.6m and an EBITDA of $4.8m, following its commissioning in late 2005.
