Allco Finance Group (AOFNF.PK) and a consortium comprising the U.S.-based ArcLight Capital Partners and Terra-Gen Power have agreed to the sale and purchase of U.S. wind energy interests for a total sale price of US$325 million. The interests being sold comprise a 3,100 megawatts (MW) wind development project in Tehachapi, California.
The Tehachapi wind development project is the largest single wind development in the US under one controlling entity. The project is supported by a landmark 1,550MW power purchase agreement with Southern California Edison that was negotiated and announced by Allco in December 2006.
Nick Bain, Allco’s Head of Infrastructure, said, "This sale has delivered to Allco and its co-investment partners a highly profitable outcome in a relatively short time frame, a result of Allco’s decision 2 years ago to establish its global wind energy business."
Allco’s after tax share of sale proceeds is expected to be approximately A$165 million, which it will use to further pay down its senior debt facilities with its banking syndicate. In addition, on closing of the sale, Allco will be released from certain letter of credit obligations totalling A$65 million. Allco’s corporate senior debt and contingent commitments are expected to be reduced by approximately A$230 million in total as a result of the sale, based on current exchange rates.
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