Renewable Energy Generation (REG), the green energy company who are listed on the London Stock Exchange’s Alternative Investment Market (AIM), are to cease all operations and sell up to investment firm BlackRock in a £64.5 million deal.
Upon shareholder approval, the company will be delisted and then liquidated. Shareholders will receive approximately 60p per share as part of the deal, a height that REG shares have not reached since April. Share prices dropped as low as 37p at the start of October, but have since been rising after a possible deal was announced, closing at 58p today. REG aim to complete the deal and pay their shareholders by 29 January 2016.
REG have blamed policies introduced by the UK government after the 2015 election, saying: “The newly elected UK Government announced the start of a process of dismantling green incentives. The proposed policy changes include the closure of the Renewables Obligation (RO) to onshore wind and ground-mounted solar projects, continued reductions to the small scale wind feed-in tariff (FIT), elimination of onshore wind from feed-in tariff contracts for difference (CFD FIT), stricter planning policies with respect to onshore wind farms and elimination of the climate change levy (CCL) exemption for renewable generators. Any one of these factors alone would have a significant impact on the Group but, taken together, the impact is profound.”
Back in July, when Energy and Climate Change Secretary, Amber Rudd, announced a number of changes relating to renewable energy subsidies, she said: “As costs continue to fall it becomes easier for parts of the renewables industry to survive without subsidies. We’re taking action to protect consumers, whilst protecting existing investment”.
Unfortunately for REM, they were not one of these parts of the industry able to survive without subsidies.
