Hong Kong-based independent power producer Sky Solar Holdings has signed a Letter of Intent to sell a 152MW portfolio of Japanese solar assets to Solar Partnership Capital for JPY17 billion ($170 million; €150 million).
Solar Partnership will buy all the shares it does not already own in the projects from Sky Solar's Japanese subsidiary, along with some liabilities associated with the portfolio. Sky Solar Japan's other assets and liabilities will be transferred to a new entity.
The proceeds will be used to repay certain existing loans that were provided as part of Solar Partnership's existing 'tokumei kumiai' investment in Sky Solar Japan and to re-invest in solar projects in Japan and other markets, Sky Solar said in a statement.
'Tokumei kumiai' is a form of anonymous partnership governed by the Japanese commercial code. More often associated with large-scale investments like real estate, the contract sees one or more 'silent investors' contribute assets to a business operator in Japan.
“Through this transaction, we remain committed to the development of our remaining projects in Japan while also unlocking value from our 74MW of completed solar projects and 78MW of solar projects that have not yet been completed,” said Sanjay Shrestha, chief investment officer of Sky Solar. “With the cash proceeds from this deal, we intend to further invest in solar development projects in Japan and other key target markets that meet our investment return criteria.”
The closing of the transaction remains subject to approval by Solar Partnership's investment committee.
Focused on downstream solar assets in Asia, South America, Europe, North America, and Africa, Sky Solar has developed 276 solar parks with an aggregate capacity of 259.1MW since inception, it said in a statement. The company owned and operated 133.1MW of solar parks as at March 2016.