Posted on: 08/12/2015
Directors at Renewable Energy Generation (REG) have unveiled plans to sell the entire business to a fund managed by American investment giant BlackRock.
The company, which was listed on the Alternative Investment Market (AIM) in London, is due to be sold for £64.5 million.
Investors are likely to receive 60p a share when the deal is completed in January, a 61.1% premium to the closing share price on 8 October, the day before BlackRock made its initial approach.
The directors blamed the UK Government’s subsidy cuts for their decision.
REG said: “On 18 June 2015, the newly-elected UK Government announced the start of a process of dismantling green incentives.
“The proposed policy changes include the closure of the Renewables Obligation (RO) to onshore wind and ground-mounted solar projects, continued reductions to the small scale wind feed-in tariff (FIT), elimination of onshore wind from feed-in tariff contracts for difference (CFD FIT), stricter planning policies with respect to onshore wind farms and elimination of the climate change levy (CCL) exemption for renewable generators.
“Any one of these factors alone would have a significant impact on the group but, taken together, the impact is profound.”
> Read REG's announcement