Octopus’ asset holding investment trust ORIT has signed conditional terms, enabling it to reap substantial profits on two Polish wind farms.
Net proceeds of the sale of its Krzecin and Kuslin projects are likely amount to a zloty equivalent of between GBP 88 million and GBP 92, the trust announced today. That’s a premium of between 14 and 19 per cent on the farms’ GBP 77 million book value as of June 30.
ORIT bought the pair in October 2021, during their construction. Its operating sister company completed both and began generation last year. With a combined capacity of 59 MW, the farms generate make enough green electricity for well over 100,000 homes, avoiding CO2-e emissions equivalent of 150,000 tonnes every year.
The farms’ buyer ORLEN is a Warsaw-listed petrochemicals firm seeking to diversify into wind and Canada. It has agreed to provide a loan to redeem mortgages secured against both turbine parks.
Completion of the sale, expected at the latest by March, should yield an internal rate of return of up to 30% over the two years of ORIT’s ownership, the British trust told investors.
What a lot of zlotys
The sale is in line with the trust’s declared strategy of freeing up capital through sale of minor assets.
Proceeds will initially go towards repaying short term debt. They may subsequently be recycled into more wind or solar projects promising capital growth.
ORIT chair Phil Austin commented: “Building new wind farms, like these two in Poland, has brought more vital green energy onto the system.
“As our portfolio becomes increasingly weighted towards operational assets, selling some of these now and paying down short term debt will give ORIT the ability to explore new opportunities to build more green energy projects“.
By early afternoon, ORIT’s share price on the LSE-250 was up just under 2%, valuing the trust at GBP 454.2 million.