30/11/2018 - 13:40

EMC deal falls through for Carnegie

30/11/2018 - 13:40

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Carnegie Clean Energy has been forced to abandon plans to sell its battery storage and microgrid business, while chairman Terry Stinson has detailed the renewable energy outfit’s recent struggles in an address at today’s annual meeting.

EMC deal falls through for Carnegie
Carnegie is developing a wave energy project in Albany.

Carnegie Clean Energy has been forced to abandon plans to sell its battery storage and microgrid business, while chairman Terry Stinson has detailed the renewable energy outfit’s recent struggles in an address at today’s annual meeting.  

Perth-based Carnegie said the planned sale of Energy Made Clean to ASX-listed TAG had been terminated after a number of the sale conditions had not been completed.

Carnegie said TAG had been unable to raise $4 million as part of the deal.

“Carnegie will now explore other options for the EMC business including other M&A opportunities,” the company said in a statement to the ASX.

TAG has informed Carnegie it is still interested in acquiring parts of the EMC business.

Meanwhile, at today’s annual meeting, Mr Stinson said EMC had provided a number of challenges for Carnegie.

“Financially, the EMC business performed far below expectations, and again this is an understatement. There are many reasons for the poor commercial performance,” he said.

“For example, all the major EMC projects that were in train when I joined a year ago were over budget and behind schedule.

“These same projects continue to be over-budget and behind schedule.

“Many of the projects are now close to completion and in my view, the situation is now stabilised, but stabilising the business, and keeping it alive, came at a significant cost to Carnegie.”

Mr Stinson also said the competitiveness of the solar industry had caused problems for EMC.

“Over the year, the EMC business integration into Carnegie was continuing, this too creating additional costs and inefficiencies,” he said.

“The LendLease joint venture also started with expected new venture growing pains, cultural adaptations, and associated additional costs.

“To compound the operational issues, management had to deal with the issues and challenges related to the various debt structures created to support the ongoing solar projects.”

It has been a tough year for the renewable energy outfit, which included the resignation of long-serving managing director Michael Ottaviano in September.

The company has also suffered funding delays at its flagship wave energy project in Albany.

Mr Stinson said the wave energy element of the business represented a positive future for the company.

“Carnegie’s wave opportunities have not diminished over the year,” he said.

“Wave energy remains one of the largest untapped renewable resources globally and Carnegie is best placed to deliver on this opportunity.

“We are not there yet, we must continue to transition the hybrid solar business and manage the legacy costs and put our full focus on wave and marine energy development.”

All motions were passed at the meeting, however the remuneration report received a strike after about 31 per cent of shares voted against the resolution.

Shares in Carnegie were flat at 0.7 cents each today.

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