Greenko Group plc Greenko agrees heads of terms with GIC (0450W)

TIDMGKO

RNS Number : 0450W

Greenko Group plc

14 August 2015

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, WITHIN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

FOR IMMEDIATE RELEASE

7.00 a.m. on 14th August 2015

Greenko Group plc ("Greenko" or the "Company")

Greenko signs heads of terms with GIC for the sale of its entire holding in Greenko Mauritius

Trading Update

In its announcement of 23 June 2015, the Board of Greenko commented on the move in its share price, and that Cambourne Investment Pte Ltd, an affiliate of GIC ("together GIC"), and Global Environment Emerging Markets Fund III LP held shares in Greenko Mauritius which are capable of being exchanged for shares in the Company with effect from 1 July 2015.

Greenko today announces that it has signed non-binding heads of terms with GIC for the sale of all of the Company's shares in Greenko Mauritius for a gross cash consideration of approximately GBP 162.8 million (the "Disposal"). The Disposal if completed would result in the sale of the Company's trading activities and assets, which comprise the development, ownership and operation of clean energy projects in India together with the release of the Company from all associated financial liabilities including debt and associated minority interests.

Whilst discussions between Greenko and GIC are at an advanced stage, the heads of terms are non-binding and the Disposal will be subject to the entry by the Company and GIC into a legally binding sale and purchase agreement. In addition, completion of the Disposal will be subject to a number of conditions, including the approval of Shareholders, in accordance with the requirements of the AIM Rules, and arrangements being agreed between GIC and the senior management, including Mahesh Kolli and Anil Chalamalasetty, for their continued involvement as managers and investors in the business.

Should the Disposal proceed, it is the intention of the Company to distribute the proceeds from the disposal, net of certain Indian taxation, transaction fees and running costs, as yet to be finalized, before confirming the final capital returns to shareholders.

A further announcement, including greater detail as to the background to and reasons for the proposed Disposal and its terms, as well as the proposed return of capital to shareholders, will be made after the sale and purchase agreement for the Disposal referred to above has been entered into.

The Board is being advised by Investec Bank plc and Arden Partners plc in relation to the Disposal.

Greenko also provides the following trading update for the six months ended 30 June 2015:-

Power generation in the period increased by 49 percent to 904 GWh, compared to 606 GWh in the comparable period last year. Installed operational capacity increased to 838 MW during the period, compared to 596 MW at the end of June 2014. The operating portfolio is performing well with average availability factors above 99 percent. This performance has not unfortunately converted into strong financial results for the period due to a late and slower start to the current monsoon season. In addition, the 70 MW Budhil hydro project has operated well, but has been selling power into the short term merchant market at reduced prices while negotiations to reach an attractive long term PPA are being finalised. The 96 MW Dikchu hydro project is at an advanced stage of completion and expected to commission in Q4 2015. The Company remains on track to meet its operational installed capacity target of 1,000 MW this year, with all projects currently under construction being fully financed. As a result of these factors, the Company's financial results for the year ending 31 December 2015 are likely to be lower than market expectations.

Overall, the backdrop for clean energy in India remains extremely positive, with strong Government support, and is attracting significant inward investment. The Company's wind and hydro portfolios have reached profitable grid parity with conventional generation in many states of the country. The Company will provide a further trading update at the time of its interim results in September 2015.

Enquiries:

 
 Greenko Group plc                          [phone] 
 Keith Henry 
  Mahesh Kolli 
  Anil Chalamalasetty 
 
 Arden Partners plc                         [phone] 
 Jonathan Keeling/Steve Douglas 
 
 Investec Bank plc                          [phone] 
 Jeremy Ellis/Nigel Robinson 
 
 Tavistock Communications                   [phone] 
 Matt Ridsdale/Mike Bartlett/Niall Walsh 
 

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, or vote in any manner, any securities pursuant to this announcement or otherwise. The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.

The statements contained in this announcement that are not historical facts are "forward-looking" statements. These forward-looking statements are subject to a number of substantial risks and uncertainties, many of which are beyond the Company's control and actual results and developments may differ materially from those expressed or implied by these statements for a variety of factors. These forward-looking statements are statements based on the Company's current intentions, beliefs and expectations about among other things, the Company's financial condition, prospects, growth, strategies and the industry in which the Company operates. Forward-looking statements are typically identified by the use of forward-looking terminology such as "believes", "expects", "may", "will", "could", "should", "would", "intends", "estimates", "plans", "assumes" or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. In addition, from time to time, the Company or its representatives have made or may make forward-looking statements orally or in writing. Furthermore, such forward-looking statements may be included in, but are not limited to, press releases or oral statements made by or with the approval of an authorised executive officer of the Company. No assurance can be given that such future results will be achieved; actual events or results may differ materially from those expressed in or implied by these statements as a result of risks and uncertainties facing the Company and its subsidiaries. Many of these risks and uncertainties relate to factors that are beyond the Company's ability to control or estimate precisely, such as changes in taxation and fiscal policy, future market conditions, currency fluctuations, the behaviour of other market participants, the actions of governmental regulators and other risk factors such as the Company's ability to continue to obtain financing to meet its liquidity needs, changes in the political, social and regulatory framework in which the Company operates or in economic or technological trends or conditions, including inflation and consumer confidence, on a global, regional or national basis. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed or implied in such forward-looking statements. The forward-looking statements contained in this announcement speak only as of the date of this announcement and the Company undertakes no duty to update any of them publicly in light of new information or future events, except to the extent required by applicable law or regulation.

Investec Bank plc, which is authorised in the United Kingdom by the Prudential Regulation Authority and regulated in the United Kingdom by the Prudential Regulation Authority and the Financial Conduct Authority, and Arden Partners plc, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, are acting solely for the Company and no one else in connection with the Disposal and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Disposal and will not be responsible to anyone other than the Company for providing the protections afforded to their clients or for providing advice in connection with the Disposal or any other matter referred to in this announcement.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

This information is provided by RNS

The company news service from the London Stock Exchange

END

AGRFXLLFEVFBBBL