Renta 4 | Global Dominion has announced that it has reached an agreement to divest its six photovoltaic parks in the Dominican Republic to investment funds managed by Pioneer Funds and JMMB Funds Sociedaddes Administradoras de Fondos de Inversión (SAFI´s) in the Dominican Republic.
The transaction involves the sale of 80% of the current ownership, while Dominion will retain the remaining 20% for a period of three years to strengthen their mutual relationship and develop the pipeline in the country.
The assets have been valued at $375 million (enterprise value for 100% of the six parks). The sale of 80% will result in a cash inflow of $102 million, of which $82 million will be collected in 2025, with the remainder of the payment deferred. The transaction will be completed once the conditions related to customary approvals have been met.
Assessment: This is excellent news and represents an important step in the company’s asset rotation strategy. This transaction significantly strengthens the company’s balance sheet, providing it with the necessary funds to continue developing its project pipeline without straining it. At the market level, the company’s balance sheet leverage had been weighing heavily on the share price, so we believe that the cash inflow from the transaction will serve to alleviate fears and boost the share price. We reiterate our Overweight recommendation and Target Price of €5.2 per share.
