Pressure Technologies to offload alternative energy division for £11.1m
By Duncan Ferris
Date: Monday 10 Dec 2018
(Sharecast News) - Pressure Technologies' shares jumped on Monday after it agreed to sell its alternative energy division to Creation Capital Corp for a total consideration of £11.1m.
The specialist engineering group said it had entered into a binding letter of intent to sell its wholly-owned subsidiary PT Biogas Holdings, which acts as a holding company for the division and trades under the name Greenlane Biogas.
The decision to sell the division follows a strategic review from June to review options that would increase market opportunities and unlock shareholder value, and concluded that the group should refocus on core manufacturing activities in the defence and oil and gas markets.
Chris Walters, chief executive of Pressure Technologies, said: "As a result of this strategic review and following the appraisal of outright sale and merger options, we have commenced a process to spin out Greenlane and list it on the TSX Venture Exchange, which will be accomplished by selling it to Creation Capital. We will remain a supportive minority shareholder and anticipate retaining our holding for the medium term."
The purchase price for Greenlane, which has been operational for 30 years and has supplied in excess of 100 biogas upgrading units in 18 countries, includes £5m in cash, £2m in common shares of Creation Capital and £4.1m by way of a promissory note.
"The global outlook for renewable natural gas (RNG) has improved again throughout the year with governments and energy majors increasing their commitment to renewables in the global energy mix, with RNG playing a significant role, particularly in the US and Europe," said Walters.
Pressure Technologies' shares were up 11.49% at 97.56p at 1305 GMT.
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