EGCO Jumps 4% after Entering the US Renewable Energy Market with a 17% Stake in Apex

EGCO surged 4% at the opening of today’s trading following the announcement of its first ever investment in the United States, a leading private utility-scale renewable energy developer called "Apex."

The share price of Electricity Generating Public Company Limited (EGCO) rose ฿4.00/share or 2.24% to ฿182.50/share, as of 11:58 local time in Thailand, with a trading value of 676 million baht.

EGCO on Thursday (October 7) announced that the company has indirectly invested in Apex Clean Energy Holdings, LLC (Apex) via EGCO Plus Company Limited (EGCO Plus), its wholly owned subsidiary. EGCO Plus entered into certain definitive agreements on October 5, 2021 to acquire a 17.46% indirect interest in Apex as a co-investor in an investment vehicle managed by Ares Management Corporation’s (NYSE: ARES) Infrastructure and Power strategy. The parties have entered into agreements to acquire a majority stake in Apex. The transaction is expected to close in 4Q21.

Apex is a private utility scale renewable development company headquartered in the State of Virginia in the United States. Apex’s business is based upon the development of renewable projects through the point of Notice to Proceed (NTP) for construction or up to the project’s Commercial Operation Date (COD), and the subsequent sale of these projects to third party investors. To date, Apex has commercialized more than USD 9 billion of utility scale renewable projects and has established a diversified clean energy portfolio with more than 30,000 MW of projects in development, representing one of the largest renewable project development pipelines in the country. Apex has transacted with utilities, the commercial and industrial (C&I) market, and global financial institutions. The company has been a leader in clean energy project development and sales for C&I customers over the past decade.

The investment is in line with EGCO’s “Cleaner, Smarter and Stronger to Drive Sustainable Growth” strategy which targets carbon neutrality by 2050 in support of the global low-carbon objectives.     

KGI Securities has an optimistic view on this deal, as it would expand a new role for EGCO as project developer in a renewable power plant including exploring new opportunities for  renewable energy in the US market. KGI maintains a rating of Outperform with a 2022 target price of 314 baht.

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