Anaergia Divests Italian BOO Projects to Arjun Infrastructure Partners

20 Aug, 2023

Anaergia Divests Italian BOO Projects to Arjun Infrastructure Partners

Anaergia Inc. (TSX: ANRG) has announced a significant development involving Arjun Infrastructure Partners. Anaergia has reached an agreement to terminate its obligations related to a substantial $145 million loan owed to Arjun. This involves the termination of the lender option that required Anaergia to purchase loans linked to six Build-Own-Operate (BOO) assets in Italy, should specific senior debt financing not be secured by a set date.

In exchange for this termination, Anaergia is selling approximately $55 million in inter-company loans (previously written off) and the equity interests in an Anaergia subsidiary that owns the projects to Arjun. Consequently, Anaergia will receive minimal cash consideration from this transaction.

This strategic decision stems from Anaergia's assessment and consultation with advisors that certain projects necessitate additional capital beyond what the company has available through its current lending facilities. The transaction enables Arjun to take over full ownership and control of these projects, providing the opportunity to infuse the required capital for successful commercial operations.

Additionally, the two entities have established a cooperation agreement to manage post-closing activities. This encompasses Anaergia's continued involvement in providing remaining Engineering, Procurement, and Construction (EPC) work, transition services, and the potential for further consideration through performance incentives and an earn-out.

Brett Hodson, Anaergia's Chief Executive Officer, emphasized that the transaction aligns with the company's strategic review and aims to ensure timely project advancement and enhanced liquidity. Hodson expressed enthusiasm in assisting Arjun and the project teams to complete construction and explore further business development prospects in Italy.

Anaergia specializes in converting organic waste into renewable natural gas, fertilizer, and water. With a global presence and proven expertise, the company provides comprehensive solutions for extracting organics from waste, implementing efficient anaerobic digestion, upgrading biogas, producing fertilizer, and purifying water across various industries.

On the other hand, Arjun Infrastructure Partners is an independent asset management firm focused on mid-market infrastructure investments. Founded in 2015, Arjun manages substantial capital on behalf of institutional investors and possesses a team with extensive experience in infrastructure sectors such as utilities, energy, renewables, digital, social, and transportation.

Arjun's commitment to responsible asset management is reflected in its strong emphasis on Environmental, Social, and Governance (ESG) considerations. The firm's proven track record in identifying investment opportunities and its operational expertise make it a key player in the infrastructure investment landscape.