Eddie O'Connor's Mainstream Renewable Power has agreed to sell a $117.5 million (€104 million) stake in its main African joint venture to a group of investors, including an arm of the World Bank.
Meanwhile, the entrepreneur, who set up Mainstream in 2008 after the sale of Airtricity, which he founded two decades ago, plans to open grey market trading in the group after it completes a €100 million-plus share sale later this year.
An initial public offering of the business is now most likely to take place in 2018, Mr O'Connor told The Irish Times. Having previously weighed a Hong Kong listing, the company will now probably target New York.
The current African deal will see Mainstream take in new investors to maintain its 40 per cent stake in a wind and solar energy joint venture there, Lekela Power, which is continuing to expand.
New investors
In effect, the new investors, including International Finance Corporation, a member of the World Bank, would end up with a 24 per cent indirect stake in the venture. Other new investors include Ascension Investment Management in Missouri, which adheres to Catholic-based socially responsible investing guidelines, and South African financial services group Sanlam.
Lenders
“We’re a hugely capital-intensive business,” said Mr O’Connor. “We want to make money [for the new investors], so we can go back to them again. I’m faced with an almost explosive number of projects that I can compete for.”
Mainstream has rolled most of its African operations into Lekela Power, the joint venture it set up last year with British-listed private equity firm Actis. The duo aim to construct more than 1,300 megawatts of power capacity in countries including South Africa, Egypt, Ghana and Senegal by 2018.
Mainstream returned a net profit of €96 million last year, compared to a €46.6 million loss in 2014. Its corporate borrowing fell by 50 per cent during the year from €118.6 million.The group is seeking to raise at least €100 million of equity.
