RBC European Utils & Infra Morning Lightbulb

Research evidence excerpt

RBC European Utils & Infra Morning Lightbulb

ormers were

affected by steeper rate increases in some countries (for example, the UK saw approximately 70bp

increases in 10-year bond yields) and elevated regulatory risks, particularly in Italy. We believe that once

war risk is removed, European utilities may continue to outperform, reflecting the positive outlook on

demand growth, and within this sector, the underperformers during the war period could experience

temporary relief.

TRIG announces disposal of Beatrice offshore wind farm stake

TRIG has announced a disposal agreement for its entire 17.5% stake in the Beatrice offshore wind farm

for ~£155m. The transaction value is a 4% discount to NAV. As previously outlined, proceeds will be

reduced to repay RCF debt (currently £240m drawn), with the transaction being the first disposal under

its £400m 12-month disposal target announced last month. Completion is expected by the end of the

year, with the buyer an existing co-shareholder, Equitix. The transaction includes £220m of project-level

borrowings and hence debt will reduce by £375m in aggregate, with pro-forma fund gearing reducing

to 39% of GAV (Dec 25: 46%). (Company Announcement).

So what? Information had previously reported that TRIG was in advanced sale negotiations for the sale

of its Beatrice stake, and hence this disposal announcement was partially expected. On valuation, a

~4% discount to NAV is weaker than double-digit average disposal premiums achieved on previous TRIG

disposals (which were in 2024 or earlier), but we think this reflects a slower renewable M&A market.

TRIG recently increased its assumed discount rate on UK offshore assets by 50bps partially in response