Arcapita in $1.56bn Irish power utility deal
Manama, July 7, 2010
Bahrain-based Arcapita Bank has entered into a deal to sell off its Northern Ireland power transmission and distribution business to a subsidiary of ESB, Ireland’s premier electricity utility for £1.03 billion ($1.56 billion).
Northern Ireland Electricity (NIE), the country's transmission and distribution business, is currently owned by the Arcapita-owned Viridian Group.
As part of the sale, ESB will also acquire additional NIE Group Companies , including NIE Powerteam Limited and Powerteam Electrical Services (UK) Limited, which provide electrical construction and maintenance services (together with NIE, the NIE Group). In total, the NIE Group employs approximately 1,300 staff, said a statement from Arcapita.
Under the terms of the share purchase agreement, ESB will pay £1.034 million for the NIE Group, subject to certain completion adjustments. ESB will also assume the existing obligations of the NIE Group, including those under their existing £175 million Eurobond.
Arcapita will continue to own the Viridian Group, which it acquired in 2006. Its principal businesses following completion of the transaction will be Viridian Power & Energy, the Power Procurement business and NIE Energy Supply. These businesses employ approximately 340 people, the statement said.
Arcapita chief executive, Atif A.Abdulmalik said: 'This announcement is part of a comprehensive strategy to refinance Viridian’s balance sheet, and to deleverage the capital structure prior to the refinancing which will be required from 2011.'
'Amidst the continuing market volatility, it is a notable achievement for Arcapita. After a four year holding period, the transaction offers us an attractive way to realize value from within Viridian, stabilize the financial structure and focus on what we continue to believe are the excellent growth opportunities for our investors in the remaining business,” Abdulmalik added.
According to him, the completion of the transaction is subject to a number of conditions, including conditions relating to Irish and UK competition clearances and notifications and a refinancing of the existing indebtedness of the Viridian Group.
Subject to fulfilment of these conditions, the transaction is expected to complete by the end of 2010, the company chief said.
Headquartered in Bahrain with offices in Atlanta, London and Singapore, Arcapita’s four principal lines of business are corporate investment, real estate investment, asset-based investment and venture capital.
To date, the Bank has completed 71 transactions with a total value of more than $28.4 billion and has an equity capital base of $1.3 billion, and $7.9 billion in funds under management.
Arcapita’s mission is to provide innovative and distinctive investment opportunities that generate superior risk-adjusted returns while adhering to Islamic principles, the company statement said.-TradeArabia News Service