Retail Supplier Announces Purchase of Partner's Interest in Joint Venture
October 12, 2020 Email This Story Copyright 2010-20 EnergyChoiceMatters.com
Reporting by Paul Ring • email@example.com
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Genie Energy Ltd. announced that it has purchased the outstanding 24% interest in its retail energy supply joint venture operating in the United Kingdom (U.K.) from its former joint venture partner.
The venture, which operates under the trade name Orbit Energy, provides electricity and natural gas service to over 100,000 residential meters in the U.K.'s deregulated retail energy market.
The purchase price was approximately $1.7 million. Net of repayment of outstanding loans, Genie paid approximately $1.4 million.
Following the transaction, Orbit Energy's operating company is a wholly owned subsidiary of Genie Energy. Genie will consolidate Orbit's results in its financial reporting under the Genie Retail Energy International (GREI) Segment.
More specifically, as described in an 8-K, "On October 8, 2020, certain subsidiaries of Genie Energy Ltd. (the 'Registrant') entered into an agreement (the 'Agreement') with Energy Global Investments Pty Ltd ('EGC') Energy Global Company Pty Ltd., Timothy Szakacs. Tom Gilpin (Szakacs and Gilpin, the 'EGC Principals') and Shoreditch Energy Limited ('Shoreditch') whereby Genie Energy UK Ltd. ('GEUK') purchased EGC’s interest in Shoreditch, the joint venture that offers electricity and natural gas service to residential and small business customers in the U.K., under the trade name Orbit Energy, in exchange for a cash payment of One Million Two Hundred Eighty Eight Thousand One Hundred Forty Nine Pounds (£1,288,149) (US$1,666,794 on the date of closing) offset by One Hundred Eighty Six Thousand Nine Hundred Twelve Pounds (£186, 912) (US$241,854 on the date of closing) in amounts owing from EGC to Genie under a loan provided to EGC in 2018 related to EGC’s capital contributions to Shoreditch. Following the transaction, Shoreditch is a wholly-owned subsidiary of GEUK."
Following the transaction, EGC has no rights in management of Shoreditch, the EGC Principals have resigned as directors of Shoreditch, and GEUK has complete control over the activities of Shoreditch
"Since its launch two years ago, our Orbit Energy initiative has validated our approach to the retail energy supply business in the United Kingdom and proven the potential for long term growth in this exciting market," said Michael Stein, Genie Energy's Chief Executive Officer. "With the purchase of the outstanding interest in Orbit, we continue to expand our international portfolio of rapidly growing retail energy suppliers."
Gail Parker, CEO of Orbit Energy, added, "Genie's investment provides a streamlined management structure that will help us to respond nimbly as we continue to execute on our growth strategy."