SIMEC dives deeper in tidal sector by acquiring 50% of Atlantis

International energy, infrastructure and natural resources group SIMEC has signed a conditional agreement with Atlantis Resources to acquire 49.9% of tidal energy developer’s share capital.

SIMEC, a GFG Alliance company, will be entitled to nominate two persons to be directors of Atlantis after the completion of reverse takeover, and upon trading re-admission, Atlantis will be renamed to SIMEC Atlantis Energy Limited.

The Edinburgh-based tidal energy developer Atlantis Resources has in turn agreed to acquire the entire issued share capital of SIMEC Uskmouth Power Limited, the owner of a power plant in South Wales.

The 336MW plant, to be converted to use an end-of-waste energy pellet as fuel, is expected to provide long-term contracted cash flows for Atlantis shareholders as it will sell power under two 20 year power purchase agreements to GFG Alliance companies, according to Atlantis.

The acquisition enables SIMEC to obtain a material stake in Atlantis’s portfolio of tidal stream and barrage projects, including Atlantis’s flagship MeyGen project in northern Scotland and the Wyre estuary project in Lancashire as well as international opportunities in Europe, Asia and North America.

The SIMEC group already owns an interest in Tidal Lagoon Power, the company developing tidal lagoon opportunities in Wales and north-west England.

Also, the broader transaction provides a route to further diversification and growth of this portfolio through engagement with the GFG Alliance, a London-based international group of businesses, founded and owned by the British Gupta family.

It combines energy generation, metal manufacturing, engineering, natural resources and financial services, and upon the completion of the transaction, Atlantis will be granted a right of first offer on a portfolio of renewable power generation assets currently owned or subsequently acquired by GFG Alliance in order to build a diversified renewable energy company of scale.

Tim Cornelius, CEO of Atlantis commented: “Following the establishment of Atlantis Energy earlier this year, we are excited about the transaction and the partnership with SIMEC and the broader GFG Alliance which will enable us to accelerate our growth and the diversity of our business.

“Along with the investment in SUP, the establishment of a formal and long term relationship with SIMEC and the GFG Alliance will be transformational for our company as we seek to create a diversified renewable energy platform of scale. SIMEC and the GFG Alliance are highly respected within the industry and will significantly enhance our visibility on the international stage.

“We see additional material value for Atlantis shareholders in what we believe is the high quality renewable power asset pipeline to which Atlantis will potentially have access following completion of the transaction.”

Jay Hambro, SIMEC’s Chief Investment Officer and CEO of Mining and Energy, added: “We are particularly excited about this opportunity to expand our investment in the tidal power sector which we see as a game-changing technology that holds huge possibilities for cheap, clean power in the future. This is also a major step towards our ambition to create 1GW of renewable energy capacity in the UK within the next three years.

“Our commitment to making a success of creating a renewable energy platform is evidenced by SIMEC’s successful track-record in investing in the UK energy sector and the re-naming of the enlarged business as SIMEC Atlantis Energy Limited.

“We want to see SIMEC Atlantis Energy Limited accelerate its development into a diversified renewable energy company of material scale across the renewables sector and we believe that our support will achieve this.”

Atlantis Resources is listed on the London Stock Exchange’s AIM which will make SIMEC Atlantis Energy the first member of GFG’s $10 billion turnover worldwide energy, metals and industrials group to be listed on public market, SIMEC said.

Futhermore, Atlantis is expected to carry out a further equity fund raising in connection with the transaction, which is subject to shareholders approval during a general meeting to be held in the first quarter of 2018, the company informed.