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Mainstream in talks with major funds ahead of equity sale stake sale

Renewables firm also close to finalising $700m fundraising for Chile project

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Mainstream Renewable Power has held discussions with major funds and energy giants interested in taking an equity stake in the Irish wind and solar developer. (stock photo)
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Mainstream Renewable Power has held discussions with major funds and energy giants interested in taking an equity stake in the Irish wind and solar developer. (stock photo)

Mainstream Renewable Power has held discussions with major funds and energy giants interested in taking an equity stake in the Irish wind and solar developer.

The company, which is also close to finalising a $700m (€656m) fundraising for a major project in Chile, has had informal expressions of interest from a range of potential partners and hopes to finalise a deal later this year.

"We are seeing interest from utilities, pension funds, sovereign wealth funds, private-equity funds, infrastructure funds, and from the oil and gas industry. There is broad interest right across the different sectors," Mainstream CEO Andy Kinsella told the Sunday Independent.

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He declined to speculate on the likely size of a deal, but said it would achieve "value" for shareholders, including management, founder Eddie O'Connor and 500, mainly Irish, retail investors.

Mainstream is developing wind and solar projects in Chile, South Africa, Egypt, Senegal and Vietnam. The long-term nature of renewable energy development means that so far, it is largely unscathed by the Covid-19 crisis.

The firm expects financial close "in the coming months" on a $700m fundraising to develop a 730MW portion of a 1.3 gigawatt Chilean project, following a $580m November fundraising. It appointed advisory firm Rothschild & Co in December to help search for an equity partner and has since met various candidates.

The formal equity process is likely to kick off in the second quarter, with potential for a deal in the second half of this year to bring in a much larger partner as a 'TopCo'.

This would allow it to build and retain more projects, and become a renewable energy "major", said Kinsella.

"We are in the position now of soft contacts with the market, meaning we are talking to anybody who is interested. I've had a lot of face-to-face meetings - both here in Ireland but mainly internationally," he said.

"We are looking for a partner as a TopCo to allow us to do this.

"Someone with a big balance sheet, because it gives us not just access to capital to do large-scale projects, but the cost of capital for someone with a big balance sheet is much better than the cost of capital we face as a successful but relatively small company.

"We are fully funded and don't need cash for our normal growth plan, but with a partner to strengthen our balance sheet we can go well beyond our plan."

The aim is "to strengthen our balance sheet because we have more opportunity than [it] will allow for".

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