US Solar Fund markets option on 200MW Californian project

• MN8 Energy, previously Goldman Sachs Renewable Power, can currently acquire 50% stake in Mount Signal 2

US Solar Fund (USF) has marketed an acquisition option over its 50% rate of interest in its 200MW Mount Signal 2 (MS2) project in California to MN8 Energy (MN8), a renewable energy company previously called Goldman Sachs Renewable Power.

Under the regards to the deal, MN8 will certainly pay a USF a non-refundable option fee of US$ 1m (EUR0.99 m) as well as will certainly have the option, for a preliminary term of 6 months extendable for a further 3 months by mutual agreement, to acquire USF's 50% passion in MS2 for an extra US$ 52.2 m omitting functioning capital.

The complete profits of $53.2 m that USF will certainly get if MN8 works out the Option are consistent with the web asset value at which USF holds MS2 at 31 March 2022 as well as the sale would imply a gross return of 11% per annum, given that USF introduced the agreement to acquire approximately 50% of MS2 from New Energy Solar (NEW) in December 2020.

MS2 is the only jointly-owned asset in the USF portfolio.

With NEW revealing the sale of its US portfolio of 14 solar assets to a subsidiary of MN8 today for a gross acquisition rate of US$ 244.5 m, including its 50% rate of interest in MS2, the Board and also Investment Manager think this is an appealing chance for USF to know the value in the MS2 investment.

NEW has gotten to a binding agreement to offer its portfolio of 14 US solar assets to a subsidiary of MN8 Energy

The Option structure allows MN8 to finish the procurement of USF's 50% passion after their purchase of NEW's 50% while providing cost assurance to USF, it stated.

Chief executive of USF's investment manager Liam Thomas said: "We delight in to agree this option with a high-profile renewable resource company like MN8, and our team believe it is a win-win for USF.

" If exercised, it will certainly monetise a substantial existing asset at its existing carrying value.

" Otherwise exercised, it delivers an incremental US$ 1m of value in the current financial year."

Must the sale continue, USF will make use of the proceeds for new investments, functioning capital, and/or future capital administration.

A further news will certainly be made at the factor when the Option is exercised or expires.