Gama Construction has put a large stake in the Tynagh Energy plant in Co Galway up for sale in a move which could net the company more than €120 million.
It is understood that several parties have approached the Turkish conglomerate to buy some, or all, of its 80 per cent stake in the plant which is expected to start operating early next year. New York-based financial advisers Fieldstone Capital Group have been appointed to handle the sale.
It is understood that a sales prospectus has been circulated among interested parties, including Viridian and Bord Gáis.
The plant is believed to be worth about €300 million, so a 40 per cent stake could earn the company about €120 million, although it is understood that its prospectus contains no reference to price. Apart from Irish-based firms, it is understood that Fieldstone has targeted a limited number of financial and trade buyers.
In the region of 40 per cent of the stake is for sale, but it could go higher. It is possible, if the price is right, that the entire stake could be sold.
The bidding process is expected to be completed in the first quarter of 2006, probably at the same time as the plant comes into operation. The Commission for Energy Regulation - led by Tom Reeves - awarded a licence to the Tynagh Group almost three years ago.
Under the licence, Tynagh has a 10-year deal to sell its output to the ESB. This guarantee is regarded as highly attractive by potential buyers. The other winner of a licence was Aughinish Alumina in Co Limerick.
Gama was among the early investors in the Tynagh project and last year it increased its stake from 40 per cent to 80 per cent after buying out the South African bank Investec. The value of these shares was never disclosed.
The other investors are believed to be associated with the private company Mountside Properties, which provided the Tynagh site to the consortium.
The Tynagh plant is a 400 megawatt power station using state-of-the-art combined cycle gas turbine technology. It is the first electricity generating station to locate in the west of Ireland.
A spokesman for Gama said yesterday that it had always been the company's intention to reduce its shareholding at a suitable time, but with several parties expressing an interest, it was sensible to appoint advisers to handle the sale.
For its part, the Tynagh group said it had been advised that Gama had received several approaches from parties interested in acquiring a stake. A spokesman said that the group remained firmly focused on bringing the project "in on time and on budget".
"Any new shareholder would be a welcome addition and would add an international perspective and vision to Tynagh as an independent power producer in the enlarging Irish energy market," said a statement from the group last night.
