Power Clouds Inc. acquires two PV projects in Italy

Written By: Stratton Report
April 10, 2017

On April 10, Power Clouds Inc. announced that the acquisition of its first two PV projects in Italy.

According to Power Clouds, the two transactions totaled €5.0 million ($5.5 million) and gives the firm operating energy plants in Italy delivering annual revenues of approximately $800,000 for the next 15 years. The transactions, per the company, represent the first completed transactions of a group of up to 12-MWs of operational PV parks in Italy.

The firm noted that the acquisitions increase its installed portfolio by 28%, and increases its annual revenues by approximately 80% due to the higher feed-in-tariffs paid in Italy.

Power Clouds stressed that the parks currently deliver 80% in annual EBITDA before debt service, have each been operating for over 4 years and bring immediate profitable net income and cash flows to PWCL.

According to the firm, the total consideration for the acquisitions was funded by way of cash payments totaling €1.3m ($1.4m) paid by PWCL, issuance of non-convertible loan notes of €1.8m ($1.95m) and a total of 10m shares of PWCL restricted common stock (valued at $0.8m), 4.2m of which was already issued in July 2016. Power Clouds also emphasized that it had assumed existing leasing debt of €1.2m ($1.3m) on one of the parks which is paid from the existing cash flows of the park.

Roberto Forlani, Chairman and Chief Executive Officer of PWCL, remarked:

This is another significant, and personally satisfying, development for PWCL. We have been working on expanding our operations to Italy for over a year now and so to complete the first two, of many we have planned there, is truly a breakthrough for us. Strategically, we now have operating plants in two European countries with more countries planned moving forward. The immediate goal for us now is to finalize the other contracts we have in Italy and expand our presence there. In addition to the current LOI’s for 12MW we are currently in tender processes for an additional 90MW for acquisition this year based on active tenders and negotiations and we see Italy as a central part of our growth in Europe over the next 18 months. The completion of these acquisitions not only proves our new business model of acquiring existing operational parks – that bring immediate positive cash flows – but also shows the markets that we are once again growing and plan to increase that growth rate in 2017 and beyond.

Power Clouds was advised by Orrick Henderson & Sutcliff (Europe) LLC, Price Waterhouse Coopers in Italy and PROTOS spa.