Isra-Mart srl: Repsol sails into Scottish offshore wind market with £50m SeaEnergy purchase

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Spain's largest oil company, Repsol, is set to enter the UK's offshore wind market after agreeing to buy SeaEnergy Renewables for £50m in a deal that will see it form a partnership with EDP Renováveis to develop two Scottish projects totalling 2.4GW.

After putting up the sale sign a year ago, Aberdeen-based SeaEnergy confirmed today that, subject to shareholder approval, the company will sell its SeaEnergy Renewables Limited (SERL) offshore wind unit to Repsol Nuevas Energias.

SERL holds a 25 per cent stake in the most northerly Round 3 offshore wind farm zone, the 1.3GW Moray Firth, alongside EDP which has a 75 per cent stake.

Under the new agreement, Repsol and EDP will form a development partnership increasing SERL's stake in the Moray project to 33 per cent, while EDP will hold the remaining 67 per cent.

Repsol will also take a 51 per cent stake in the 0.9GW Inch Cape wind farm proposed for the outer Firth of Tay, in which SERL currently holds a 100 per cent stake. EDP will then take a 49 per cent stake in the Scottish Territorial Waters project.

SeaEnergy shareholders will vote on the Repsol acquisition by 30 June. The full transaction is also subject to approval by The Crown Estate, which leases the sea bed for both projects.

SERL has been loss-making since it was founded, and has been funded by way of inter-company loans from SeaEnergy.

Under the proposed deal, SeaEnergy would keep net proceeds of £29.1m, after transaction costs and following its repayment in full of loans from LC Capital Master Fund and EDP totalling £6.9m.

Steve Remp, SeaEnergy executive chairman, said that the deal demonstrated the company's ability to build up a £50m business in under three years.

"This deal shows how SeaEnergy uses early mover advantage to create value from new opportunities. We created a business out of nothing but a concept, and three years later it has been valued at £50m," he said.

"The time is right for us to capitalise on this success. This deal allows us to continue to participate in the fast-growing UK and European offshore wind markets, and to build on our enviable track record of working with some of the world's biggest companies."

SeaEnergy now plans to focus on developing its year-old SeaEnergy Marine subsidiary, which aims to offer specialist construction vessels to offshore wind farm developers.

The company wants to be the first to deploy a highly capable vessel, combining state-of-the-art dynamic positioning, an active roll suppression system and an active motion-compensating gangway, centred around a mother ship.

SeaEnergy Marine said that it has gathered pricing proposals from potential shipbuilders and is talking to wind turbine manufacturers, utilities and offshore wind developers to secure letters of intent for chartering the new system.

The vessel is expected to have a two-year construction programme, so the first units could be working in the market in mid to late 2013, in time for the construction of the first Round 3 offshore wind farms.

As part of the disposal of SERL, SeaEnergy Marine will also sign a strategic co-operation agreement with EDP to supply construction vessels to future projects.