Renewable Energy Company:

Catalyst Commercial Services Ltd — Thu, 22 Nov 2007 09:39:47 +0000

Infinis, one of the UK’s biggest renewable energy companies, has pulled its flotation planned for this autumn. The flotation had been estimated to value the company at between £700m and £1bn, one of the biggest public offerings yet seen in the renewable energy sector. Infinis is owned by Terra Firma, Guy Hands’ private equity group. Alan Lovell, chief executive, told the Financial Times the planned flotation would not go ahead and that there were no plans to revive it for several years. He said the recent turbulence in the markets was part of the reason but added that Infinis had produced a five-year plan for Terra Firma, which resulted in the private equity group deciding to hold on to it for “the medium term” of three to five years. Infinis is one of the biggest “pure play” renewable electricity companies in the UK, producing more than a 10th of the UK’s total renewable energy. It generates most of its energy from landfill sites, capturing methane from dumps and using it to generate electricity. However, this business will reach natural limitations in the next decade, as most of the landfill sites in the UK suitable for methane recovery have been taken up. The methane produced by older landfill sites will gradually run out and the government is diverting waste away from dumps to recycling and incinerators. Infinis is also building up its biomass business, which involves burning wood and waste products to generate electricity, and is expanding into wind energy. However, Mr Lovell noted the high price being paid for wind assets in today’s markets meant Infinis was hampered in the search for wind acquisitions. He said a flotation would have provided the cash and equity necessary to fund such acquisitions but that buying existing wind assets in cash was too expensive. Instead, Infinis will focus on building wind farms on sites already in industrial use, where gaining planning permission should be easier. BT Group unveiled a similar strategy this summer when it said it would offer sites around its facilities to wind farm developers, a strategy expected to produce about 250 megawatts of wind power. Terra Firma bought Infinis as part of its takeover, for £531m, of the Waste Recycling Group in 2003, and expanded it by acquiring some of the landfill business of Shanks, the waste management company, for £277m. Terra Firma sold the rest of the Waste Recycling Group to FCC, the Spanish construction company, last year for about £1.4bn.

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Renewable Energy Company:

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