Macquarie To Sell Solar & Wind Power Generation Businesses
Zacks Investment Research | Apr 04, 2019 10:07PM ET
Macquarie Infrastructure Company (NYSE:MIC) recently entered into definitive agreements to divest each of its portfolios of solar and wind power generation businesses. The company anticipates generating total gross proceeds of $215 million from these transactions.
Per one of the agreements, Macquarie will sell its 203MW (gross) portfolio of wind generation assets to DIF Infrastructure V — a fund of DIF. The other agreement will involve the company to divest its 142 MW portfolio of solar power generation facilities to Goldman Sachs (NYSE:GS) Renewable Power LLC. Notably, both deals are subject to regulatory clearance and projected to close in stages through 2019.
Notably, the move is in sync with the company’s portfolio-restructuring program, which involves its goal of exiting its renewable power generation businesses. As a matter of fact, the proceeds from these divestments will help Macquarie to finance part of its growth investment in other businesses. Greentech Capital Advisors served as Macquarie’s financial advisor while Winston & Strawn LLP was its legal advisor.
Our Take
Macquarie is well poised to gain from healthy growth opportunities in Atlantic Aviation and MIC Hawaii segments in the quarters ahead. MIC Hawaii segment's revenues in the upcoming quarters will likely gain momentum on the back of implementation of new gas rates. Also, investments planned, primarily for the International-Matex Tank Terminals ("IMTT") segment, will be beneficial.
Further, the company’s growth investments are likely to strengthen performance of its segments. For 2019, growth capital expenditure is likely to be $275-$300 million, with a major chunk likely to be used for the IMTT segment. In addition, the company's healthy cash flow allows management to return higher value to shareholders. In 2018, it distributed dividends totaling $378.4 million.
Macquarie currently carries a Zacks Rank #2 (Buy). Over the past year, the company has returned 9.1%, outperforming the Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.