Modus Group to sell 41MW-capacity solar park in Poland, could buy solar projects for development – Chairman

Lithuanian conglomerate Modus Group is in the process of selling a 41 MW-capacity solar park in Poland, Chairman Liudas Liutkevicius said.

The process is at a bidding stage, and Modus expects to have a sale and purchase agreement signed by the end of this year, Liutkevicius said without further elaborating.

Green Genius, Modus’s solar business subsidiary, is still developing the 41 MW-capacity solar park; total investment into the facility is estimated at EUR 36m, and construction is expected to be completed early next year, according to a July press release.

Modus Group is handling the disposal in a similar way to the sale of its 45.45 MW-capacity solar park portfolio in Poland in July, Liutkevicius said, adding it has an internal M&A team.

In the July deal, Modus sold the asset to UK-based asset management company Aberdeen Standard Investments for an undisclosed consideration, as reported. The vendor took legal advice from CMS and handled the financial side in-house, as reported.

The group plans to invest the proceeds of both disposals into developing new renewable projects in various countries, Liutkevicius said. Alternative options to fund these projects include bank loans, bridge or alternative financing, and bonds, he said, adding that the company may also consider involving an equity investor for a specific project.

Liutkevicius would not specify how much Modus plans to invest in renewable energy in the coming few years. Last year, the group invested EUR 50.34m into renewable energy projects, according to a press release.

The group has projects with a total 92 MW capacity under construction, around 87 MW of which comprises solar plants under development in Poland and Ukraine, Liutkevicius said. It plans to start developing projects with a further 245 MW capacity in 2020, and around another 370 MW capacity in 2021-2022, he said, adding that it will focus on building solar parks in Poland, Spain and Italy; and Its energy arm, Modus Energy, is also active in Lithuania, Latvia, Belarus and Ukraine.

Modus Group reported EUR 31m revenue from renewable energy assets last year, up from EUR 14.44m in 2017, with EUR 7.94m EBITDA, up from EUR 6.26m in 2017. Its 1H19 revenue from renewable energy stood at EUR 20.5m, up from EUR 11.8m in 1H18.

Modus Group would also consider acquiring new renewable-energy projects for development in Central Eastern Europe and Southern Europe, he said.

The company will target 50 MW-capacity solar-energy projects with a total estimated investment size of EUR 40m, Liutkevicius said, but has not set specific limits for biogas plants. He did not specify how many acquisitions it is likely to make by the end of 2020, or comment on how much it is likely to spend on acquisitions.

The group aspires to be among the top 25 renewable energy developers in Europe within the next five years, Liutkevicius said.

Modus Group is owned by Lithuanian entrepreneur Kestutis Martinkenas, as reported. It reported EUR 342.94m sales in 2018, up from EUR 273.03m in 2017, with EUR 28.54m EBITDA, up from EUR 22m in 2017. Aside from the energy business, Modus also operates a car-sharing business, and is active in the automotive-retail and real-estate sectors.

by Agnė Mažeikė in Vilnius

Full article on Mergermarket website: https://www.mergermarket.com/intelligence/view/2914801

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