Simec Atlantis sells 79pc of its tidal engineering business

31st Oct 2022 16:51

(Sharecast News) - Simec Atlantis Energy has agreed to the sale of a 79% stake in its advanced tidal engineering and services (ATES) division to Proteus Marine Renewables, it announced on Monday.

The AIM-traded company said the division was responsible for the design of its tidal turbines to-date, and the deployment and recovery of all turbines at the MeyGen site.

It said the sale would have no impact on its majority ownership of MeyGen, with ownership of the full project development rights and all four turbines at the site remaining with MeyGen.

Simec said it remained focussed on the development of the MeyGen site following the recent award of a 28MW contract for difference (CfD).

The board said the sale would allow the newly-incorporated Proteus to grow its product and services offering across a broader scope of marine renewables, while keeping its immediate focus on tidal energy.

Simec kept a minority 21% shareholding in Proteus, and said it would continue a "strong relationship" with it through a collaboration agreement.

It also agreed contracts to ensure the provision of ongoing services that would allow Proteus to provide continued support to the MeyGen operating tidal array.

The company received an initial cash consideration for the sale of £0.5m, and said it would receive a deferred cash consideration of up to €0.5m, contingent on Proteus achieving financial close of the Raz Blanchard project.

It said the sale would "significantly reduce" group operating costs, and together with the net sale proceeds, would provide additional funding to support operations and the development of key projects.

In 2021, ATES's pre-tax profit was £0.4m, and its net liabilities on 30 June this year totalled £0.5m.

"We are proud to have developed the ATES business into what it is today and wish Drew and the team every success in the future," said chief executive officer Graham Reid.

"A key part of the sale is the agreements in place that ensure that it is business as usual for our existing tidal power projects but allows our focus to be on the delivery of the MeyGen site, the home of tidal energy."

At 1441 GMT, shares in Simec Atlantis Energy were flat at 1.2p.

Reporting by Josh White for Sharecast.com.