Italy’s Building Energy heads east with Chinese funding

Hong Kong-listed investment firm ZZ Capital International has agreed to invest approximately €70 million in Building Energy, an Italian renewable power producer.  

ZZCI’s acquisition – which includes a co-investment from Beijing-based Zhongzhi Capital, the company’s main shareholder – will be made through the purchase of convertible bonds and equity interests, according to an announcement by the Chinese investment firm. 

ZZCI will join Italian private equity firm Synergo and European investment house Three Hills Capital Partners, which already hold respective stakes of 30 percent and 7 percent in the Italian company. The latter has also participated in a €100 million convertible loan note issuance by Building Energy, which would provide €65 million in new capital to support growth. 

Three Hill Capital Partners is rolling its existing bond holding into a new convertible instrument, which will also be subscribed by ZZCI and other investors. As part of the agreement, it will see an early repayment of one-third of the invested capital alongside the closure of a South African project, said the London and Luxemburg-based firm. 

Building Energy is expected to build more than 700MW of renewable energy assets in the next two years, with a pipeline of more than 2.6GW in 20 countries. It had total assets of €163.38 million as of December 2016, according to a filing by ZZCI with the Hong Kong Stock Exchange. 

“With the backing and expertise of ZZCI, Building Energy now has the ability to take advantage of growth in the Asian renewable energy market,” said Fabrizio Zago, chief executive of Building Energy. “We believe that the sector will continue to grow and that, with the support of our partners at ZZCI, we will expand significantly into China and other Asian markets.”

“Building Energy fits well within our investment strategy, which is focused on investing in entrepreneur and management-led companies operating in five key sectors and helping them to develop their business in China,” added Sergio D’Angelo, European head of ZZCI. 

ZZCI, formerly known as Asia Capital Holdings, is an alternative investment platform acquired by Zhongzhi Capital in 2016, with offices in Hong Kong, London, New York and Tel Aviv. It focuses on five sectors including environmental, healthcare, industrial, financial services, education, media and technology. Zhongzhi Capital, itself a private multi-asset management group, has also invested about $2 billion in the five sectors across more than 20 assets since 2011, according to ZZCI.