T-Solar sponsor I Squared could consider breakup sale

02 December 2019

I Squared Capital could look at breaking up T-Solar in order to facilitate the sale of the Spain-based renewable energy portfolio company, a source familiar with the situation, two sector bankers and an infrastructure buysider said.


With both photovoltaic and solar thermal assets, and a footprint spread across six countries, the company is more likely to maximize value by selling the business in parts instead of in one lot, the source said.


Goldman Sachs is reportedly guiding the sponsor in the assessment of unsolicited offers that valued T-Solar at around EUR 1.5bn. However, there is no formal auction process in place, the first source and a further source familiar with the matter said.


Macquarie, First State and Orix submitted non-binding bids for the business, the Spanish press reported last month. Orix did not respond to requests to comment. Macquarie and First State declined to comment.


With 392 MW of installed capacity, T-Solar was created in 2006 to operate photovoltaic power plants, and last year added two solar thermal power plants in Spain with 100 MW capacity, according to its website.


Solar thermal energy is “not for everybody” and could be split out for a sale, the first source said. Although demand remains strong for solar assets in general, there is much less interest for solar thermal than for other assets, one of the sector bankers said.


Another way of dividing the business would be to sperate the international assets from the ones in Spain, the first source said. Peru, the company’s second largest market, could also be sold separately, this source said.


T-Solar has 267 MW installed capacity in Spain, about 68% of its total, while Peru has 44 MW, according to its website. The company also has operations in Japan, the US, India and Italy, with 53 plants in total.


Last year, the company’s CEO told this news service that it wanted to divest its assets in Japan, the US, Peru and India. Since then, it has sold a plant in California.


There are also concerns about the quality of T-Solar’s longer-term development pipeline, a third sector banker tracking the deal said. Many investors are placing increased value on this part of renewable independent power producers’ portfolio, this banker said.


T-Solar and Goldman Sachs declined to comment. I Squared did not respond to requests for comment.