Mainstream taps Rothschild for equity partner search

Eddie O’Connor owns 55% of company

Eddie O’Connor’s Mainstream Renewable Energy has hired investment bank Rothschild to find an equity partner, which is likely flush out takeover bids from major oil firms.

The Irish Times had reported that Mainstream, which is focused on developing wind and solar projects in emerging markets, was seeing advisers to assess its business portfolio within a view to finding a partner. Sources have confirmed that Rothschild in London have been selected as the advisers.

Mainstream currently has 1,500 megawatts (MW) of projects in construction across Chile, Egypt, Senegal and South Africa – the equivalent of about a quarter of peak demand for electricity in the Irish market.

The company, where Mr O’Connor is 55 per cent shareholder, is set to see its pipeline under construction rise to 2,000 MW in the coming months, according to a spokesman. He declined to comment on the identity of the adviser.

Shareholders

The remainder of the company is owned by Mainstream’s management and a group of high-net-worth individuals, who have stuck with business since its establishment in 2008.

While it is not clear whether Mr O’Connor and the other shareholders would be willing to exit at this stage, industry sources said that the most aggressive investors in clean-energy deals - big oil companies - would likely want full equity ownership.

Royal Dutch Shell, Total and BP have been among the most active dealmakers in this space in 2019, as the world’s largest fossil fuel producers prepare for a transition to low-carbon energy.

Mainstream says that it has a total global pipeline of about 9,000MW, which will “involve a multi-billion dollar, multi-gigawatt construction programme”.

Mainstream, led by chief executive Andy Kinsella, swung into a €487.5 million profit last year from a €5 million loss for 2017, driven by the sale of a Scottish offshore wind farm for up to €650 million to French utilities giant EDF.

The deal allowed the company to repay all its debt and buy back shares and warrants held in the business by UK bank Barclays, Japanese trading house Marubeni and Australian financial group Macquarie.