Completion of Investment

RNS Number : 7183J

Scirocco Energy PLC

25 August 2021

 

25 August 2021

Scirocco Energy plc

("Scirocco Energy" or "the Company")

Completion of Investment into Energy Acquisitions Group Ltd

Scirocco Energy (AIM: SCIR), the AIM investing company  targeting attractive assets within the European sustainable energy and circular economy markets, is delighted to announce, further to its 9 July 2021 RNS, the completion of its investment into Energy Acquisitions Group Ltd ("EAG"), a specialist acquisition and operating vehicle in the sustainable energy sector, and in which Scirocco will hold 50% interest. 

By creating a joint venture platform alongside EAG, Scirocco Energy will leverage EAG's strong network and industry leading expertise to gain access to a pipeline of already identified acquisition opportunities within the anaerobic digestion and biogas market, and to jointly explore other opportunities within our broader sustainable energy and circular economy target markets.

Highlights

· Scirocco Energy has completed its £1.2m investment into EAG and subsequently owns 50% of EAG (https://www.energy-acquisitions.com/)

· EAG will use the funds to acquire 100% of Greenan Generation Limited (GGL) and its 0.5MWe Anaerobic Digestion (AD) plant in Northern Ireland

· GGL is a cash generative, operational AD plant which the EAG team believe can be optimised to enhance EBITDA margins and free cash flow

· EAG anticipates initial annual turnover of c. £1.1m from GGL

· The investment into EAG has been funded by cash on the balance sheet and the EAG team has identified further opportunities to invest in a pipeline of AD plants in the UK totalling c. £30 million in value

· This aligns with the new strategy, approved by Scirocco Energy's shareholders on 9 July 2021, to deliver value through acquisitions in the European sustainable energy and circular economy markets

· As part of this transaction, Scirocco Directors, Tom Reynolds and Muir Miller, will join the board of EAG

Tom Reynolds, CEO at Scirocco Energy, comments: " I am delighted to announce the completion of this transaction today, marking an important milestone in Scirocco Energy's new strategy to target assets within the European sustainable energy sector.

The initial investment provides an entry point into the rapidly growing UK Biogas market, and provides a platform that will allow us to capitalize on the significant pipeline of opportunities in this sector in collaboration with the highly experienced and well-networked EAG team. 

While the initial acquisition of GGL - which is expected to complete very soon - is relatively small in size, it is strategically important in terms of delivering immediate cash flow which can be re-invested into a compelling pipeline of complementary opportunities alongside our new partner.

We also believe that the addition of activities, which benefit the UK's net zero target, will make Scirocco's investment proposition more attractive for investors due to the growing importance of ESG considerations, and will ultimately lead to a re-rating of the Company over time."

Chris Kerr, Managing Director, EAG added: " We are thrilled to complete the establishment of this JV, creating a platform that benefits from the complementary expertise of Scirocco Energy and EAG. Our extensive experience and understanding of the AD market, and pipeline of near-term opportunities uniquely position this joint venture to take advantage of the growing Biogas market and contribute positively to the de-carbonisation of challenging sectors in industry such as heating, transport and agriculture where demand is growing strongly.

Our initial acquisition of GGL provides the template of the opportunities that we will be targeting given its proven operational status and material scope to enhance free cash flow and EBITDA margins through plant optimisation techniques."

This announcement contains inside information for the purposes of Article 7 of EU Regulation No. 596/2014, which forms part of United Kingdom domestic law by virtue of the European (Withdrawal) Act 2018.

For further information:

Scirocco Energy plc Tom Reynolds, CEO Doug Rycroft, COO	[phone]
Strand Hanson Limited, Nominated Adviser James Spinney / Ritchie Balmer / Rory Murphy	[phone]
WH Ireland Limited, Broker Harry Ansell / Katy Mitchell	[phone]
Buchanan, Financial PR Ben Romney / Jon Krinks / James Husband	[phone]

 

END

 

 

MSCFIFEETIIEFIL