Perth-based energy giant SSE said on Friday it agreed to sell a 49.9% stake in its Stronelairg and Dunmaglass wind farms for about £635 million to Greencoat UK Wind plc (UKW) and a major UK pension fund.
“SSE will continue to operate both assets while future development rights are in line with equity share,” said SSE.
“SSE announced in November 2018 its intention to create value through disposals of stakes in its growing portfolio of onshore and offshore wind farms, in line with its strategy to create value from development and operation, as well as ownership, of assets.”
SSE said it intends to use up to £200 million of the proceeds to fund a “discretionary share buyback in accordance with the authority granted by shareholders at SSE’s Annual General Meeting on 19 July 2018 and Chapter 12 of the Listing Rules.”
The remaining proceeds will be used to reduce net debt.
The buyback is expected to commence before the transaction completes.
SSE finance director Gregor Alexander said: “Both Stronelairg and Dunmaglass are a testament to SSE’s ability to design, develop, construct and operate first class renewable energy assets.
“Onshore wind makes a huge contribution to supplying low carbon electricity to the GB market and to meeting the UK’s carbon reduction targets.
“The sale of stakes in these wind farms to Greencoat is a continuation of SSE’s longstanding approach of partnering and securing value for shareholders at appropriate times.”