SSE is to sell nearly half its stake in two Highland windfarms to enable it to fund a share buyback programme and make a dent in its £9 billion-plus of net debt. The FTSE 100 energy company, which is headquartered in Perth, said it will offload a 49.9 per cent stake in the Stronelairg wind farm at Fort Augustus and Dunmaglass wind farm near Inverness to renewable energy fund Greencoat UK Wind and its co-investor - a pension fund managed by Greencoat Capital. The deal, which is expected to close at the end of next month, is valued at £635 million. SSE said that £200m of the proceeds of the sale would go towards the share buyback, which was announced last year. It added that “the remaining proceeds will be used to reduce net debt”, which the firm estimated in its interim results would stand at £9.8bn by the end of March. READ MORE: Profits plunge at SSE as challenges mount SSE, which will continue to operate both wind farms when the sale goes through, said the deal would allow the business to realise shareholder value. Shares in the business, which issued a profit warning last September, have been on a downward trajectory since May 2018, falling by 18 per cent from 1,427.5p to 1,170p. SSE finance director Gregor Alexander said: “The sale of stakes in these wind farms to Greencoat is a continuation of SSE’s longstanding approach of partnering and securing value for shareholders at appropriate times.” He added: “Both Stronelairg and Dunmaglass wind farms are a testament to SSE’s ability to design, develop, construct and operate first class renewable energy assets. “Onshore wind makes a huge contribution to supplying low carbon electricity to the GB market and to meeting the UK’s carbon reduction targets.” Greencoat UK Wind, which in December entered into an agreement to acquire the Douglas West wind farm in south west Scotland from Cheshire-based Blue Energy, already has existing interests in the Highlands with the Stroupster wind farm in Caithness and Corriegarth wind farm near Inverness. The fund will pay £452m for a 35.5% stake in Stronelairg and Dunmaglass while the unnamed pension fund will pay £183m for a 14.4% stake. SSE will continue to hold the remaining 50.1%. Greencoat UK Wind hopes to raise £131m via a rights issue to help pay down some of the debt it is using to finance its share of the transaction. READ MORE: London energy giant Greencoat acquires further Scots wind farm The fund’s chairman Tim Ingram said that he expects the deal to “deliver attractive investment returns”. “This transaction builds on our longstanding relationship with SSE and we are delighted to be co-investing with a major UK pension fund partner," he added. Stronelairg wind farm, which was commissioned in December 2018 and is made up of 66 turbines, has an installed generating capacity of 228MW. Thirty-three turbine Dunmaglass, meanwhile, has an installed generating capacity of 94MW. In December SSE confirmed that a planned merger of its retail arm with Npower had been scrapped amid “very challenging market conditions”. Npower announced this week that it plans to cut its 16,300-strong workforce by 900 in the coming year.
SSE is to sell 49.9% of its interest in the Stronelairg wind farm at Fort Augustus and the Dunmaglass operation near Inverness to help it fund a share buyback scheme and cut some of its debt, which stands at over £9bn ($12bn). Renewable energy fund Greencoat UK Wind and a pension fund managed by Greencoat Capital are expected to pay £635m ($831m) at the end of March, with SSE stating £200m ($262m) will go to the buyback programme and the rest reducing debt. Greencoat will take a 35.5% stake, the pension fund 14.4%. SSE will continue to operate the Scottish wind farms.