U.S.-based clean energy and carbon credit developer Econergy International seeks to sell or merge the company with another firm in order to maximize the value of its portfolio and pipeline of Latin American energy assets and other business lines.
Econergy said April 14 that it named Piper Jaffray Ltd. to advise it on the process.
On April 11, the London-listed Econergy rejected a below-its-share-price overture from carbon credit developer Trading Emissions. It said it also received an approach from Consensus Business Group.
ï¿½Independent directors have concluded that shareholder value is more likely to be maximized through seeking a sale or merger partner which will be better placed to fund the company’s extensive development portfolio,ï¿½ Econergy said.
Analysts said Econergy would struggle to finance all five of its under-development projects on its own because of the credit crunch and difficulties raising debt.
ï¿½The independent directors believe that the company should have access to sufficient working capital to continue to deliver its existing Phase 1 projects and to maintain momentum in its Phase 2 activities whilst a buyer or merger partner is sought in the next few months,ï¿½ Econergy said.
Phase 1 projects include the 147-MW Corani hydroelectric project in Bolivia (HNN 2/6/07), the 19.89-MW Areia Branca hydro project in Brazil (HNN 1/14/08), three wind projects in Brazil and Costa Rica, and a coal-mine methane project in the United States.
Phase 2 projects include two wind projects in Mexico. Additionally, Econergy has entered into, but not completed, an agreement to acquire an interest in the 20-MW Pipoca hydroelectric project in Brazil. (HNN 9/6/06)
Econergy said it has entered an agreement to sell 27 percent of its 80 percent holding in Areia Branca to one of its partners in the project, Financierings-Maatschappij voor Ontwikkelingslanden N.V. The disposal is contingent on approvals of its power customer, national utility Centrais Eletricas Brasileiras S/A (Eletrobras), and national development bank Banco Nacional de Desenvolvimento Economico e Social.
For information, contact Michael Covington or Nigel Daly, Investment Banking, Piper Jaffray Ltd., London, United Kingdom; (44) 20-31428700.