FCC of Spain buys into wind energy

Reuters
Published: August 21, 2008

SYDNEY: Fomento de Construcciones y Contratas, or FCC, one of the largest Spanish builders, agreed to pay €190 million for Babcock & Brown Wind Partners' wind energy assets in Spain.
FCC will assume €590 million, or about $880 million, in debt as part of the deal, the company, which is based in Barcelona, said in a filing to regulators. The assets include 14 wind parks with capacity of 421 megawatts.
The purchase marks FCC's first investment in energy as it embarks on a €4 billion drive announced in May to diversify its business as the Spanish building market slumps. The sale of the assets will yield a profit of about 266 million Australian dollars, or $234 million, for Babcock & Brown Wind Partners, the company said in a statement to Australian regulators.
"The size of the total portfolio is substantial and will allow FCC to become the sixth-largest wind-energy operator in Spain," Alejandra Cosio, an analyst at Ahorro Corporación Financiera, wrote in a note.
Buying the Spanish wind parks gives FCC assets with capacity to produce energy for a city of 200,000 people, FCC said. The transaction includes an additional 45 megawatts of capacity still under development, FCC said.

Babcock & Brown Wind Partners said in February that it might sell assets in Europe to benefit from increased valuations from projects that were not reflected in its own market value.
The price for the Spanish assets "produces a large gain on sale for BBW and, importantly, is materially higher on a per megawatt basis than the current market implied value of BBW's total portfolio," said Miles George, chief executive Babcock & Brown Wind Partners.
FCC fell 7 cents, or 0.2 percent, to €33.10 in Madrid trading. Babcock Wind fell 16 cents, or 12 percent, to 1.15 dollars in Sydney. The Spanish assets represent about 17 percent of its total wind portfolio.
Babcock & Brown Wind Partners decided not to sell its assets in Germany, after reviewing offers it received for the ventures. A divestment process for projects in Portugal and France has been extended and any sale would be agreed in the fourth quarter, it said.