Starting next January, ACS and Vinci will analyze the first potential purchase of renewable energy projects through the alliance they created in 2022, within the framework of the sale of the Industrial Services division of the Spanish group to the French group.
Specifically, Cobra, the flagship of the transaction, will put into operation in the coming weeks – before the end of this year – several solar assets in Brazil and Spain, so that will exceed 1.2 gigawatts (GW) of renewable energy in operation.
In this way, according to sources familiar with the process, the company led by José María Castillo will offer the joint venture of ACS and Vinci the purchase of solar installations with an installed power of 1 GW.
The companies led, respectively, by Florentino Pérez and Xavier Huillard, agreed three years ago to create a joint venture to acquire, once they come into operation, the renewable projects that Cobra then had in its portfolio. The Spanish company has a 49% stake, while the French group holds control with 51%.
The agreement establishes that Cobra IS, owned by Vinci since December 31, 2021, will propose to the joint venture the acquisition of renewable plants in operation in batches of 1 GW capacity. Cobra, 100% owner of the assets, currently has a potential portfolio of renewable energy projects in the world for more than 12 GW for development until 2030.
In 2023, the company led by José María Castillo put into operation the first almost 600 megawatts (MW) in Brazil. Specifically, the service of the Belmonte photovoltaic complex, located in São José do Belmonte, in the municipality of Pernambuco, began. The plant has a net installed power of 570 MW, with a production of 1,200 GWh per year, equivalent to the annual consumption of 723,000 homes in the region.
In addition to the Belmonte park, which will be part of the first lot that ACS and Vinci can purchase, Cobra is also developing the Guaimbê, Mundo Novo, Cristino Castro and Pecém e Raios de Panaíba solar projects in the South American country, with a total capacity greater than the 1.6 GWp.
Meanwhile, in Spain the commissioning of several photovoltaic plants with a capacity greater than 100 MW located in different parts of the national geography is being finalized.
The 1 GW block that Cobra will offer will consist of approximately 900 MW in Brazil and 100 MW in Spain. Starting in January, ACS and Vinci will have to analyze the transaction and decide if they give substance, thereby, to an alliance that to date has not had any activity. Its eventual preferential offer, in any case, will have to respond to the market price, which could imply an amount of around 800-1,000 million euros.
The sources consulted point out the uncertainties regarding whether the Spanish and French groups will finally agree to start the joint venture. If they choose not to transfer an offer, Cobra will have several alternatives: keep the projects within its scope, sell them to another Vinci business unit or transfer them to a third party.
Variable amount
In parallel to the analysis of the purchase option for Cobra’s assets, at the beginning of next year ACS and Vinci will evaluate the valuation that each of them makes of the ‘earn out (variable amount)’ included in the agreement they signed for the transfer of the industrial services division of the Spanish multinational to the French one.
The transaction involved the cash payment of 4,902 million euros. Besides, included an ‘earn out’ of up to 600 million eurosalso in cash, at a rate of 20 million for every 0.5 GW developed by the industrial activity sold (up to the state of ‘ready to build’, ready to build) between March 31, 2021 and up to the following seven years to the execution of the sale (December 31, 2028), extendable for an additional 18 months if it is not able to develop 6 GW in the first 42 months (until June 2025).
At the end of the first half of 2024, ACS had collected 80 million euros from Vinci for the development of 2 GW (40 million this year and 40 million last year). The Spanish group also updated the fair value of the ‘earn out’, reducing it from 295.59 million euros at the end of 2023 to 258.47 million. Vinci, for its part, revised upwards by 50 million euros the variable amount it estimated during the first half of this year.
Cobra’s estimate is to reach 1.5 GW in ready to build every year until 2030. This would imply that in eight and a half years the total amount would rise to between 12 and 13 GW, which would result in a disbursement from Vinci to ACS of approximately 520 million euros.
Cobra has its two main countries in the development of renewable energies in Brazil and Spain. Now, The objective is to balance its current portfolio so that the Spanish market covers 30% of the 12 GW; The United States and Australia, where engineering is already beginning to build projects, take another 30%; and South America also, approximately, 30%.
Cobra aims for a new record for the year
Cobra IS recorded revenues of 4.9 billion euros in the first nine months of this yearwhich represents an increase of 4.5% compared to the same period in 2023. It is thus heading towards a new record after reaching 6.5 billion euros in 2023. The third quarter showed, however, a decrease of 2%, to 1,594 million. In 2019, before the pandemic and before ACS sold the industrial services division to Vinci, which included Cobra, engineering reaped 6.3 billion euros in revenue. Operating margin in the first six months grew from 7.5% to 7.8%.
Cobra’s contracting between January and September was 7,000 million, less than the 8,500 million in 2023. Now, The portfolio grew to 16.4 billioncompared to 14.4 billion the previous year. Regarding investments, Cobra disbursed 704 million until June, compared to 126 million a year earlier.
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