Coro Energy finalises purchase of Vietnam solar portfolio

Coro Energy announced on Thursday that it has finalised the acquisition of a rooftop solar portfolio from KIMY Trading and Service shareholders, which was first agreed last November.

The AIM-traded firm said it secured a 100% interest in a leased rooftop solar portfolio in Vietnam, encompassing four locations near Saigon and possessing a combined generating capacity of 3.25 megawatts (MW).

It said the solar assets had been in operation for two years, and were subject to an existing power purchase agreement with the state-owned Electricity Vietnam (EVN).

The power purchase agreement had a remaining term of 18 years.

Following a thorough due diligence process and site visits, one of the rooftop systems within the portfolio was excluded from the acquisition.

As a result, the total capacity of the portfolio was adjusted to 2.39MW, impacting the acquisition price.

The firm said the acquisition was settled at a total cost of $1.3m, equivalent to around $543 per megawatt.

Coro said that at completion, it assumed existing specialist renewables debt worth $0.6m from a Vietnamese bank.

It made a cash payment of$111,912, of which $30,000 was designated to obtain specific firefighting certificates, while a payment of $285,000 was made through the issue of new shares in the company.

The shares would be issued at the mid-market price six months after completion, and locked in for 18 months.

A further cash payment of $300,000 would be made in six equal monthly instalments starting from completion.

Coro Energy said it intended to fund the cash portion using the existing balance of its Vietnam subsidiary, along with future cash flows generated by its three-megawatt project and the acquired project's revenues.

As of the end of April, the cash receipts from the three-megawatt project amounted to $115,000.

“KIMY incurred a loss of approximately $195,000 in the year to 31 December 2022, which includes various cost of sales and administration expenditure which will not be inherited by Coro post-acquisition,” the board said in its statement.

“Consequently, the acquisition is expected to be both cash positive and profitable from completion.”

At 0956 BST, shares in Coro Energy were down 8.05% at 0.2p.

Reporting by Josh White for Sharecast.com.