UPDATE – Trading Emissions to buy Econergy for US$52.5 million

Trading Emissions Plc said May 15 it is to buy Econergy International Plc for an agreed 27 million pounds (US$52.5 million) in shares, to develop clean energy projects in Latin America.

Trading Emissions said it would pay 0.233 new Trading Emissions share for each share of Econergy, a U.S.-based clean energy and carbon credit developer.

“In the current economic environment, Trading Emissions’ proposal delivers the most certain outcome for (Econergy) and its stakeholders,” Econergy Chief Executive Tom Stoner said.

Econergy operates the 147-MW Corani hydroelectric project in Bolivia (HNN 2/6/07) and has under construction 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.

On April 11, the London-listed Econergy rejected a below-share-price overture from Trading Emissions. It said it also received an approach from Consensus Business Group. Econergy then announced it was seeking 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. (HNN 4/15/08)

Analysts had 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.

In May, Econergy reported a 500 percent revenue increase in 2007 thanks to revenues from the Corani hydro project, which it acquired last year. (HNN 5/9/08)

Trading Emissions has one of the largest funds in the world that is dedicated to promoting clean energy and reduction of carbon dioxide emissions. It has been participating in development of the 255-MW Santa Rita hydroelectric project in Peru. (HNN 11/23/07)

Econergy planned Phase 2 projects including 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.

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