Centrus advises firmus energy in securing £285m financing package

Transaction Overview

Centrus advised firmus energy (“firmus” or the “Business”) in securing a new financing package to refinance existing debt and provide additional financing for their network expansion and energy transition strategy which includes the injection of locally produced biomethane into the gas grid.

The facilities totalling £285m included a £195m term loan, £75m capex facility and a £15m RCF. 

Background

firmus, a core infrastructure asset, is one of three gas distribution operators in Northern Ireland. The Business is owned by funds managed by Equitix, a leading global investor, developer and long-term fund manager of core infrastructure.

firmus’s network is constructed from low maintenance polyethylene (PE) pipes, capable of transporting low carbon fuel alternatives including biomethane and hydrogen. The Business also operates a gas retail business (firmus energy supply), which is the largest gas supply business in Northern Ireland by consumption, providing essential energy solutions to a wide range of customers, including domestic, commercial, and industrial clients.

Centrus’ Role 

Centrus were appointed as financial and hedging advisor to firmus in the refinancing of the company’s debt facilities. 

The transaction leveraged Centrus’ understanding of the regulated utilities market to engage an appropriate pool of prospective lenders, which led to a to a highly competitive pricing package relative to the regulators allowance.

Credit Agricole Corporate and Investment Bank, DekaBank Deutsche Girozentrale, Ulster Bank Limited and Landesbank Hessen-Thuringen Girozentrale were appointed as arrangers, and National Westminister Bank Plc as agent and Security agent.

The refinancing process included a range of detailed workstreams, including:

• Articulating the credit story and engagement with lenders
• Complex structuring and valuation analysis
• Full documentation negotiations
• Hedge structuring

Added Value 

• firmus has achieved long-term financing at a highly competitive margin, which has helped increase profitability and optimise performance vs. the regulators cost of debt in the GD23 period.
• Centrus competed the institutional market alongside the banking market in order to drive the right tenor and price.

“Centrus advised us through each stage of the refinancing. They became a seamless and valuable extension of our team through this process. Their analysis, and in depth understanding of the lenders in the market allowed us to achieve the optimal financing solution for our business. In addition their ability to communicate the options available to both the management team, shareholders and other stakeholders allowed firmus to optimise performance against the regulatory allowance for our GD23 debt raise. We are pleased with the outcome of this financing process and Centrus’s support and contribution throughout”

Denise Curran, FD – firmus Energy 

“firmus energy, supported by funds managed by Equitix, has successfully completed the refinancing of its group debt facilities. These new debt facilities will continue to support the ongoing investment in the gas network and in energy customers across Northern Ireland, as the company delivers its’ GD23 price control business plan and supports the Northern Ireland energy transition with the injection of locally produced, renewable biomethane into the gas grid. We enjoyed working with Centrus, who did a good job of guiding us through the process and ensuring firmus obtained the financing package required to achieve our future growth plans””

Niall Martindale, CEO – firmus energy

“Centrus is delighted to have supported firmus energy and Equitix in structuring and arranging £285m of competitive new debt facilities. This funding package refinances existing debt facilities and provides additional financing for network expansion which will enable the continued rollout of natural gas and biomethane in Northern Ireland, a key cornerstone of the energy transition strategy.”

Geoff Knight, Managing Director – Centrus

For more information, please contact our team.

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