TIDMGOOD

RNS Number : 0218Z

Good Energy Group PLC

20 January 2022

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

Good Energy Group PLC

("Good Energy" or "the Company")

Strategic disposal of generation portfolio for up to GBP24.5m

Good Energy Group PLC (AIM: GOOD), the 100% renewable electricity supplier and innovative energy services provider, today announces the disposal of its 47.5MW renewable generation asset portfolio (the "Disposal") as part of an ongoing strategic shift to energy and mobility services.

Transaction summary

As previously announced in a strategic update on 25 November 2021, the Company appointed KPMG LLP to lead a sale process for the Company's entire 47.5MW generation portfolio. Following a competitive process, the disposal of the portfolio has been completed with Bluefield Solar Income Fund ("BSIF") who are advised by Bluefield Partners LLP.

The Disposal is for a total consideration of up to GBP24.5m. This consists of initial and deferred consideration elements:

   -- Initial consideration of GBP16.4m, less distribution since the lockbox date of GBP0.7m. Cash proceeds of GBP15.7m 
      were received on completion. 
 
   -- Deferred consideration of up to GBP8.1m, will largely be calculated with reference to an agreed financial model 
      and based on the actual operational, technical, real estate and financial position of the projects. It is 
      anticipated that this process will be substantially completed, and payments made by the end of February 2022. 
 
   -- The transaction is at a premium to net book value. As of 30 June 2021, the portfolio was held on the balance 
      sheet at a net book value of GBP17.7m, with gross assets of GBP56.8m and debt outstanding of GBP39.1m. The 
      portfolio recorded pre-tax profits of GBP0.2m in the six months ended 30 June 2021. 
 
   --   The Company is now substantially debt free with a strong cash position, strengthening the Company's balance 
      sheet. 
 
   -- The 47.5MW generation portfolio provides around 15% of Good Energy customers' electricity and will continue to do 
      so via existing power purchase agreements. 
 
   -- Bluefield previously acquired the Good Energy developed West Raynham Solar Farm in 2015. 
 
   -- The Company was advised by KPMG LLP as financial advisor regarding the Disposal. Norton Rose Fulbright are its 
      retained legal advisors. 

Investing for growth

   -- Proceeds from the transaction will be used to accelerate and support further investments across both transport 
      and decentralised energy to deliver Good Energy's strategic plan. These investments will not occur all at once 
      and in the meantime, proceeds have further strengthened the Company's balance sheet. 
 
   -- The Company intends to participate in the current funding round being undertaken by its subsidiary Zap-Map. This 
      will allow Zap-Map to embark on its next course of commercial and development goals, which will crystallise its 
      leading position for its market services in the UK and initiate steps of international expansion to selected 
      territories. 
 
   -- The Company is currently building a new platform for its decentralised energy service business, to enhance 
      existing products and propositions and deliver new services for feed in tariff customers. This platform will 
      enable smart export for solar customers, and the ability to pay actual as opposed to deemed rates, providing 
      material benefits to the business and customers. 
 
   -- Good Energy is a supplier of 100% renewable power and an innovator in energy services. It has long term Power 
      Purchase Agreements with a community of 1,900 independent UK generators which underpin its commitment to 
      supplying renewable power and Uswitch Green Tariff Gold Standard and Which? Eco Provider accreditations. The 
      generation portfolio supplied approximately 15% of Good Energy's total customer demand. The Company will maintain 
      existing PPA arrangements with the sites after the Disposal and continue to expand relationships with more UK 
      generators. 

Nigel Pocklington, Chief Executive Officer of Good Energy, said:

"The sale of our generation portfolio at a premium to book value is a transformational moment for Good Energy and a fantastic deal for all of our stakeholders. We are using the capital from our past, to invest in our future.

"Last year, we outlined our clear strategic direction to capitalise on a rapidly growing market in decentralised, digitised clean energy and transport services, based on 100% 'real' renewable power.

"We are ideally positioned to benefit from this trend through our investment in Zap-Map, the UK's leading EV app, and our growing stable of other energy products and services.

"We expect to make further investments across both transport and decentralised energy to deliver our strategic plan, which we believe has massive headroom for growth.

"Alongside these investments into mobility and energy services, this transaction reduces debt and further strengthens our balance sheet, which is particularly important given the current volatility in the energy market."

Neil Wood, Bluefield Partners LLP, said:

"Bluefield's success in this process is a mark of our commitment to the UK renewables sector and drive to find high quality, highly regulated assets for our shareholders. They are a great fit for our existing operational portfolio."

Enquiries

 
 Good Energy Group PLC                        Email: press@goodenergy.co.uk 
  Nigel Pocklington, Chief Executive 
  Charlie Parry, Head of Investor Relations 
  & CoSec 
  Luke Bigwood, Director of External 
  Affairs 
 
 SEC Newgate UK                               Email: GoodEnergy@secnewgate.co.uk 
 Elisabeth Cowell                             Tel: +44 (0)7900 248213 
 
 
 Investec Bank plc (Nominated Adviser 
  and Joint Broker) 
 Sara Hale / Jeremy Ellis                     Tel: +44 (0) 20 7597 5970 
 
 Canaccord Genuity Limited (Joint              Tel: +44 (0) 20 7523 4617 
  Broker) 
  Henry Fitzgerald-O'Connor 
 

About Good Energy www.goodenergy.co.uk

Good Energy is a supplier of 100% renewable power and an innovator in energy services. It has long term Power Purchase Agreements with a community of 1,900 independent UK generators.

Since it was founded 20 years ago, the company has been at the forefront of the charge towards a cleaner, distributed energy system. Its mission is to support UK households and businesses generate, store and share clean power.

Good Energy is recognised as a leader in this market, through our green kite accreditation with the London Stock Exchange and as the only energy supplier with Gold Standard Uswitch Green Tariff Accreditation for all tariffs.

About Zap-Map www.zap-map.com/live/

Launched in June 2014, with a mission to accelerate the shift to electric vehicles (EV) and help the drive towards zero carbon mobility, Zap-Map is the UKÕs leading EV mapping service. The charging point map, available on desktop and iOS/Android apps, helps EV drivers to search for available charge points, plan longer journeys, pay for charging on participating networks and share updates with other drivers.

Zap-Map currently has more than 320,000 registered users, and over 95% of the UKÕs public points on its network. Over 70% of UK EV drivers have downloaded Zap-Map, with growth in Zap-Map downloads more than keeping pace with the rapid growth in the EV market.

For more information, please visit www.zap-map.com.

Strategic rationale - acceleration of strategic shift to Energy & Mobility services

The transaction follows the announcement on 25 November 2021 regarding the Group's intention to dispose of the generation portfolio, through a managed sale process.

Prior to this announcement, the Company had outlined a clear strategic direction to capitalise on a rapidly growing market in decentralised, digitised clean energy and transport services based on 100% 'real' renewable power. This strategic direction received strong shareholder support throughout our successful defence of the recent hostile takeover attempt.

The Company is accelerating its transition to an energy services provider, leading in selected areas of electric transport and decentralised generation as the energy transition continues to gather pace. With 100% renewable energy remaining core to the business, the Company will take several important steps towards accelerating this strategic shift.

Details of the transaction

á Good Energy has divested the entire issued share capital of Good Energy Holding Company No.1 Limited ("Holdco" or "Target") (the "Transaction"). Holdco owns eight operational energy producing assets through its subsidiary Good Energy Generation Assets No.1 Limited ("GEGAN").

o All figures have been completed as of 30 June 2021, with final amounts calculated via a lockbox mechanism as at the completion date.

o The long-term debt facilities provided by Gravis Capital Partners (ÒGravisÓ) through GCP Green Energy 1 Limited, have transferred with the assets as part of the Disposal.

á Total consideration of up to GBP24.5m, will be split between an initial consideration and deferred consideration:

o Initial consideration of GBP16.4m, less distribution since the lockbox date of GBP0.7m. Cash proceeds of GBP15.7m were received on completion.

o Deferred consideration of up to GBP8.1m, will largely be calculated with reference to an agreed financial model and based on the actual operational, technical, real estate and financial position of the projects. It is anticipated that this process will be substantially completed, and payments made by the end of February 2022.

o There are the following elements of deferred consideration. Energy yield and power purchase agreements, technical assessments of site conditions, asset life and finance and tax.

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END

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