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Abengoa Yield plc (Nasdaq:ABY), the sustainable total return company that owns a diversified portfolio of contracted assets in the energy and environment sectors, today announced that it has entered into a definitive agreement with Abengoa, S.A. to dropdown a second set of assets for a total amount of approximately $142 million of equity value.
The transaction has been approved by Abengoa Yield’s board of directors, with the approval of independent directors, and by Abengoa’s board of directors. Closing is subject to the satisfaction of customary conditions, including approvals from financing institutions and, in some cases, from partners.
The assets consist of:
– ATN2, an 81-mile transmission line in Peru.
– Shams, a 100-MW solar power asset in the United Arab Emirates (20% stake) and Helioenergy 1/2, a 100-MW solar power asset in Spain (30% stake).
– Honaine and Skikda, two water desalination plants in Algeria with an aggregate capacity of 10.5 Mft3/day (25.5% and 37% stakes, respectively).
Abengoa Yield expects that this portfolio will generate incremental run rate cash available for distribution of approximately $14 million per year before debt service associated with dropdown financing. The dropdown will be financed with the existing financial resources of Abengoa Yield and cash on hand.
Santiago Seage, CEO of Abengoa Yield, said: “This second dropdown will add 200 MW of installed capacity to our renewable portfolio, will reinforce our presence in the transmission lines sector and will permit us to enter into the water sector, which we expect will contribute to our future growth.”
In addition, Abengoa Yield has started conversations with Abengoa regarding a potential third dropdown for a total equity value in the range of $200 to $250 million. This acquisition would include the $100 million call option announced in December 2014.
