Taiwan’s Swancor sells offshore wind developer to Stonepeak

31 July 2019 - 12:00 am UTC

Taiwan’s Swancor Holding has agreed to sell its renewable unit and a stake in the Formosa 2 offshore wind farm to New York-based fund manager Stonepeak, according to a stock exchange disclosure today (31 July).

 

The decision was made almost a month after the company announced an extension to the disposal timeline to “broaden its search for potential buyers”.  

 

The Taiwanese firm will retain a 5% stake in Swancor Renewable, which owns 25% in the 376MW Formosa 2 offshore wind project. It will also have the right to mandate a director to the board of the renewable developer as a shareholder. 

 

The sale will have a deal consideration between USD 25.98m and USD 101m and will translate into an estimated net gain between USD 9.14m-USD 84.63m. The transaction will be completed through three installments pending on the progress of share transfer, as well as on the financing and construction of the Formosa 2 project. 

 

The financial close for Formosa 2 will reach by the third quarter of this year, while the share transfer is likely to complete in three to six months, a company spokesperson told at a press conference today. Once the key milestones of share transfer, financing and construction of Formosa 2 are complete, the net gain for Swancor from the sale could reach up to USD 84.63m, he said.

 

The deal marks Stonepeak’s maiden foray into Asia’s renewable market. The US investor will use Swancor Renewable as a platform to beef up its investment in Taiwan offshore wind, which will then pave way for the US fund’s expansion into Japan, Korea, and Southeast Asian renewable markets, the spokesperson said.

 

The sale comes at a time when Macquarie (75%) and Swancor (25%) are in the process of raising debt and equity funding for the 376MW Formosa 2. Financial close was previously scheduled at, or not long after, the end of the second quarter.

 

The Formosa 2 project is poised to commence operation next year, as previously scheduled, with more abundant funding and an unchanged development team, the spokesperson said. 

 

Going forward, the Taiwanese firm will shift its focus on wind equipment manufacturing as well as R&D of carbon fiber fabric and other new materials. It is also interested in potential acquisitions in Taiwan.

 

Swancor Renewable and Macquarie Capital developed the island’s first commercial offshore wind farm called Formosa 1. The 8MW first phase began operations in 2017, while the 120MW second phase is set to be completed this year. The Taiwanese firm failed to secure any capacity for its proposed Formosa 3 project in Taiwan’s 1.7GW offshore wind competitive tender last year.

 

In May, several senior Macquarie Capital bankers based in Hong Kong, Taiwan and South Korea have quit to help Stonepeak Infrastructure Partners launch a USD 1.25bn global renewable energy fund, as reported by our sister publication SparkSpread. The fund targets developed economies in Asia, such as Japan, South Korea and Taiwan.

 

On 20 June, the Taiwanese firm said it planned to sell 100% of its renewables unit to a European or an American energy company. It said at the time that the contract signing was scheduled towards the end of June.

 

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