Bankinter S.A. - Saeta Yield SA (A14NV1) Announces a new ROFO dropdown for 3Q17

Report

Bankinter S.A.

EUR 100.00 For Business Accounts Only

Announces a new ROFO dropdown for 3Q17

At the 1Q17 results call, management said they had agreed to buy Lestenergia (144 MW of wind in Portugal and in operation) from ACS, most likely in 3Q17. The price was not disclosed, we would estimate an EV in the region of €200mn. The equity (some €100mn) should be paid with existing cash after the Carapé acquisition closes in the next few weeks.

Saeta is committed to produce double-digit CAFD growth in 2017, up from the current €61.4mn and €68.5mn after Carapé. We would not rule out the possibility of an additional ROFO dropdown in 2017, a move that would ensure that CAFD grows. This could potentially see higher dividends and put the prospective div yield somehow above 10%. With its acquisition strategy, Saeta is increasing the yield for its shareholders without calling for new capital.

Our Buy recommendation and target price of €11.70 per share are unchanged.

11/05/2017 3 EN

Underlying

Saeta Yield SA

Saeta Yield SA is a Spain-based company engaged in the utility industry. The Company specializes in the production of energy from renewable sources. Its business activities are divided into two segments: Solar thermal plants and Wind farms. The Solar thermal plants segment comprises solar energy generation installations in Spain. The Wind farms sector is responsible for the operation of a range of wind farms located in various countries, including Spain, Uruguay and Portugal. It cooperates with Actividades de Construccion y Servicios SA (ACS). Furthermore, the Company is a parent of a number of entities, such as Extresol 1 SL, Al-Andalus Wind Power SL, Parque Eolico Valcaire SL, which are active within the energy production sector.

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ES0105058004 Spain

Provider

Bankinter S.A.

Bankinter S.A. is a Spanish brokerage firm established in 1989. The company's line of business includes the provision of market research and trading services for Equity and Fixed Income products.

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