Parent Of Retail Supplier Sells Solar Portfolio
July 5, 2018 Email This Story Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • email@example.com
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South Jersey Industries (SJI) has entered into an agreement to sell its portfolio of solar energy projects to an entity managed by Goldman Sachs Asset Management (GSAM) for approximately $350 million in cash.
Through its wholly-owned subsidiary, Marina Energy, SJI owns 76 distributed solar energy projects with total capacity of 204 MW. The projects, located at 143 sites across New Jersey, Maryland, Massachusetts and Vermont, provide power to schools, hospitals, and commercial and industrial facilities. All of the projects are included in the sale
The total consideration for the transaction is approximately $350.0 million in cash, which consists of $287.4 million for the sale of solar assets and $62.6 million for the sale of certain Solar Renewable Energy Credits (SRECs)
"This transaction represents the latest chapter in our ongoing effort to transform our business by monetizing non-core, non-regulated businesses and increasing investments in regulated assets that provide highly-visible cash flows and earnings" said Michael J. Renna, President and CEO, SJI.
Under the terms of the agreement, Marina will sell all projects in the portfolio to GSAM and lease back certain projects to preserve investment tax credits (ITCs) previously received by the company. Marina will also sell GSAM the solar renewable energy credits (SRECs) generated by the projects, which will allow SJI to maximize its proceeds from the transaction.
The agreement calls for SJI to receive $63 million of the purchase price within the next week, with the balance being received over the next several months as individual projects in the portfolio satisfy closing conditions. SJI currently expects that nearly all projects in the portfolio will satisfy their closing conditions prior to December 31, 2018. "SJI is committed to achieving optimal deployment of the proceeds, including but not limited to, potential repayment of outstanding indebtedness and potential reduced share issuance under our existing forward equity agreement, as we continue to reshape our business," SJI said