Helio Capital Holding (Italy) - Jan 2008

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01 January 2008

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Listed vehicle Cape Live has acquired an 85% stake in renewable energy producer Helio Capital in a deal valued at approximately €3m. The buyout transaction was originated by the company’s three managers who will retain the remaining 15% stake. The deal took close to six months to complete.

Debt

The initial deal did not involved any debt, however every single photovoltaic plant project in the pipeline will require a senior debt package, for which banks have already agreed to provide a 1:9 equity to debt financing as cash flows are guaranteed by law.

Company

Helio Capital was founded in 2007 with the purpose of designing, building, managing and exploiting photovoltaic parks for energy generation. The initial investment will serve to fund the construction of three parks for a total 3.5 megawatt (mW) capacity, two in Puglia and one in Sicily. The development strategy foresees the construction of 10 more plants, with generating capacities ranging from 1-10mW each, with a target to generate 75MW in the next three years. Land sites have been identified and negotiations are ongoing. The backers’ plan is to position the company nationally before considering an expansion to other European countries until reaching a total production capacity of around 200mW. The potential exit strategy includes a trade sale at the multinational level. The company has not yet turned any sales, but the first plant is expected to start operating in the second semester of this year. Sales are assured for the next 20 years. Once authorisation from local authorities is granted, the national energy distributor ENEL is bound by law to buy all renewable energy produced by the plant during its first two decades. A fixed buying tariff from ENEL, plus a government incentive tariff on top gives Helio plants a prospective EBITDA margin of around 60% on sales. Helio Capital will be managed by three senior professionals with a relevant background in the energy sector as well as strong and complementary skills suitable for implementing the industrial plan agreed with Cape Live and to manage the growth of the company.

People

Simone Cimino, Andrea Nunnari and Giuseppe Scaturro led the deal for Cape.

Advisers

Equity - MBL & Partners, Alessandro Marena (Legal)

Sourced from: Southern Europe unquote" 72 (Mar 2008)