Hargreaves Services, which delivers services to the industrial and property sectors, has sold its renewable energy subsidiary Brockwell to Lantern Bidco, in a deal worth £23m.
Lantern Bidco is a newly incorporated company backed by energy sector investors.
The deal will see initial gross proceeds of £21m, with a further £2m payable dependent upon the successful financial close of a future development project.
Roger McDowell, chairman of Hargreaves, said: “The Board is pleased to have completed the sale of Brockwell and wishes the new owners every success in the future development of Brockwell’s renewable energy asset portfolio.”
Hargreaves announced its intention to sell Glasgow-headquartered Brockwell, which develops renewable energy projects on former coal mining sites in Scotland, earlier this month.
The net assets of Brockwell at completion were £10m. After deduction of transaction fees and other non-recoverable costs, the board has estimated that Hargreaves will record a profit on disposal of Brockwell of approximately £4m excluding the contingent consideration.
Hargreaves has said it intends to use the cash received to reduce bank borrowings.
Hargreaves retains certain freehold land assets on which Brockwell intends to develop renewable energy assets in the future and as a result the Group will continue to have a landlord/tenant relationship with Brockwell on arm’s length terms.