Downing Renewables in exclusive talks to sell Gabrielsberget wind farm

Downing Renewables announced on Thursday that it is in exclusive discussions regarding the sale of its entire interest in the Gabrielsberget wind farm in Sweden.

The London-listed firm said the sale was expected to complete in the fourth quarter at a small premium to the carrying value as of 30 June, and was projected to return about 14% of the company's net asset value (NAV).

DORE acquired Gabrielsberget in January 2022 for £19.8m.

Since then, a series of contractual and operational enhancements, including a recent five-year extension to the operating lease that contributed a £4.4m uplift in valuation, had driven a roughly 50% increase in the investment’s value as of June 2024.

The move was seen by the investment manager as an opportune moment to realise the gains from the improvements.

Downing said the proceeds from the sale would be used to fully repay DORE’s revolving credit facility and to support further growth and reinvestment in its hydropower portfolio.

That would include both expanding the existing portfolio and funding ongoing projects aimed at optimising revenue.

Additionally, the sale would free up capital to continue DORE’s share buyback programme, enhancing shareholder value.

“It is testament to the expertise of our in-house asset management team that we have secured the marked increase in the asset's value and now have the opportunity to realise it,” said Tom Williams, partner and head of energy and infrastructure at Downing LLP.

“This transaction will place the company in a favourable position to capitalise on an attractive pipeline of internal and external investment opportunities in our continuing efforts to increase quantity and quality of returns for our shareholders.”

At 0826 BST, shares in Downing Renewables & Infrastructure Trust were up 1.76% at 81p.

Reporting by Josh White for Sharecast.com.