- Altius Renewable Royalties Corporation’s (ARR) subsidiary has signed a US$40 million financing agreement Hodson Energy LLC
- Altius will acquire future royalties related to solar plus battery storage development projects from Hodson Energy
- The royalty will be in place until a minimum total return threshold is met
- US$9.8 million will end an existing development loan facility and acquire new projects
- Altius Renewable Royalties Corporation (ARR) is up 0.91 per cent trading at $8.82 per share as of 12:32 ET.
Altius Renewable Royalties (ARR) subsidiary, Great Bay Renewables LLC, has signed a US$40 million financing agreement.
Under the agreement, Altius will acquire future royalties related to solar plus battery storage development projects from Hodson Energy LLC.
Altius is a recently formed renewable energy company and Hodson is providing access to its entire portfolio of solar plus storage projects. Any additional projects will also be added to this new royalty investment structure with Great Bay.
“This is another example of Great Bay’s flexible, partner-like capital supporting a quality project developer as the broader renewables sector navigates the current challenges of interconnection delays, inflation, higher interest rates and supply chain issues,” Frank Getman, CEO of Great Bay, said.
According to Altius, Great Bay will receive a 3.00 per cent royalty on all projects developed and vended by Hodson until a minimum total return threshold is achieved.
The transaction will be paid off in tranches over the next three years as Hodson achieves certain project milestones, with an initial investment upon closing of US$14 million.
Approximately US$9.8 million of the initial investment will be used by Great Bay to retire an existing development loan facility and acquire new projects.
In addition to royalties, Great Bay has the option to receive a portion of the proceeds from project sales. Any cash Great Bay elects to receive under this option would count toward the target return.
Altius stated its subsidiary also received warrants to purchase a minority interest in the common equity of Hodson and has the option to invest an additional $20 million as royalty financing in the future.
Altius Renewable Royalties Corporation (ARR) is up 0.91 per cent trading at $8.82 per share as of 12:32 ET.