Spain

Spain

Spanish assets sale heralds new player -- BBW makes fresh start

Babcock & Brown Wind Partners (BBW) -- which has agreed terms to sever all ties with Babcock & Brown, its beleaguered one-time management company -- has finalised the $1.2 billion sale of its portfolio of operating wind capacity in Spain. The 420.5 MW of plant is being bought by Spanish construction conglomerate Fomento de Construcciones y Contratas (FCC). The company has paid EUR 190 million ($283 million) and is assuming around EUR 590 million ($879 million) in debt as part of the deal, first announced in August (Windpower Monthly, September 2008).

For FCC, the acquisition is the first transaction under its three year EUR 4.1 billion strategic plan, published last May, to diversify risk away from an ailing construction sector towards renewable energy. It has established a new business division, FCC Energía, to run its renewable energy operation.

The deal with BBW takes FCC from being one of the few construction majors in Spain without any wind assets to being the sixth biggest wind operator in the country, behind Iberdrola Renovables, Acciona Energía, Endesa, EDP Renováveis and Union Fenosa Energías Renovables. While the big four all have utility connections, including Acciona, which owns 25% of Endesa, FCC does not, it points out, making it Spain's top independent wind power producer.

For BBW, the deal, closed last month, is the latest in a wide-ranging disposal of European wind assets, which has already seen it offload Enersis, a Portuguese joint venture it owned with Babcock & Brown (B&B), a troubled asset management company listed in Australia (Windpower Monthly, December 2008). BBW has consistently denied the disposal plan had been connected with B&B's need to raise cash. But while it originally said it would also sell assets in France and Germany, BBW now intends to keep its German capacity.

The wind fund's managers are also pursuing discussions to buy additional wind assets from B&B, which is being paid A$40 million by BBW to terminate the existing management and advisory agreements. BBW has already paid B&B A$35 million upfront while the remaining A$5 million is due on June 30, 2009. BBW's share price, which had slumped amid concerns of a conflict of interest between minority shareholders and B&B, has rallied since plans for the termination agreement were first announced last November. BBW's existing staff will remain in place.

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