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Terra Firma exits 409MW UK wind with sale to JP Morgan

Almost 18 months after taking Infinis private, Guy Hands’ firm has sold its UK onshore wind portfolio which it said had been ‘adversely affected’ by government policies.

Terra Firma has completed the sale of its UK-based renewables operator Infinis by selling a 409MW wind portfolio to JP Morgan Asset Management.

The deal includes 19 wind farms with a total capacity of 343MW, with an additional 66MW project due to be operational by the end of the month. Terra Firma said the deal excludes a portfolio of 14 sites in development which it will look to sell separately.

The sale follows up on the agreement sealed with 3i Infrastructure last year to offload Infinis’ 296MW of landfill gas assets for £185 million ($224.9 million; €205.4 million).

It also concludes Terra Firma’s lengthy attempts to exit the whole of Infinis after it initially listed a third of the company in November 2013, valuing it at £780 million, the bottom of its £930 million range. In December 2014 Terra Firma told the London Stock Exchange it was “exploring options to crystallise the value” of its 68.8 percent stake in the company. After failing to receive offers it deemed attractive enough, Terra Firma acquired the remainder of Infinis it did not own in October 2015, taking the firm private with a valuation of £555 million.

The buyback was also a reaction to government cuts affecting the renewable energy sector, with the UK ending its subsidy regime for onshore wind a year early and removing the exemption from the Climate Change Levy for electricity generated from renewables. Infinis said the latter of the two cuts would reduce its EBITDA by £7 million in the year ending March 2016.

Upon the decision to take the company private a few months following, Infinis chairman Ian Marchant said the cuts and a reduction in power prices “have adversely affected both the cash generation and the growth prospects of the business”.

Despite this admission, Hands said following the sale to JP Morgan that Infinis “is one of the few platforms of scale in the UK that has the operational capability for further growth”.

Terra Firma bought Infinis – then known as WRG – in 2003 through its €2.1 billion Terra Firma Capital Partners II fund.