Allete Goes Private, Vestas’ Strong Q4

This week in business news, Allete is going private in a $6.2B
deal, Aeris suffers from financial struggles, and Vestas secures 6,
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Welcome to Uptime News Flash. Industry news lightning fast. Your
hosts, Allen Hall, Joel Saxum, and Phil Totaro discuss the latest
deals, mergers, and alliances that will shape the future of wind
power. News Flash is brought to you by IntelStor. For market
intelligence that generates revenue, visit www.intelstor.com. Allen
Hall: First up, the U. S. Federal Energy Regulatory Commission has
given its approval for a 6. 2 billion acquisition of Allete. The
buyers are the Canadian Pension Plan Investment Board and Global
Infrastructure Partners. The company brings significant renewable
assets to the table, including Minnesota Power and Allete Clean
Energy, which operates over 1, 300 megawatts of wind capacity
across seven states. Now, Phil, this has been going on for several
months now, but it looks like it's finally climbed that last rung
in that ladder to become a private company again. Phil Totaro:
Yeah, which I think is interesting and important given who the
investors are. Keep in mind that GIP just got gobbled up by
BlackRock. And the Canadian Pension Plan Investment Board has been
making, you know, boatloads of investments around the world. Not
only in Canada. Companies like this, but also individual assets
where they are a usually minority but co owner so this is giving
them the diversity, it's giving BlackRock and, you know, through
GIP you know, more assets in their portfolio, which they, you know,
they're obviously making a concerted effort and it's, it's part of
their strategy to you know, to build up that, that pipeline. So
this is, I believe You know, a total of 1. 3 gigawatts of
operational wind with substantially more in, in the pipeline. So,
you know, it's a great thing to, to see this happen and, and
usually in a take, in a go private deal The reason you want to do
that is to kind of sort out some of the financials and, and there's
an opportunity that they could, you know, re IPO Allete at some
point. I like the move because Joel Saxum: Allete is a, you know,
they're not a huge wind operator, but Clean energy, but I know that
they've got ambitions to do some more development. So we are
bringing in fresh capital. Also Allete's headquarters in Minnesota
power is up in Duluth, Minnesota, which is a small town of about
80, people. And this will bring some hope, hopefully bring some
jobs in up there and a little bit of an expansion. Allen Hall: Down
in South America, Brazilian wind blade manufacturer Aeris has
approached its creditors seeking a 60 day extension on upcoming
interest payments. The company's financial strain stems from a
slowdown in new wind turbine contracts. Leading to mounting
pressure on its balance sheet. Now, current financials show a
concerning picture with net debt reaching about 550 million reales
and a debt to EBITDA ratio of 3. 2. Joel, Sonoma has made
acquisition efforts towards Aeris for the last couple of years. Do
those offers become more serious on Aeris part as they run into
some financial difficulty? Joel Saxum: I think Aeris as a company
has to turn to Sonoma as a more and more possible outlet. It just
reminds me of a game of Monopoly I played at one point in time
where I was trying to buy some houses and every time I came around
to the houses that I wanted, The person who was holding them, they
got a little bit more expensive. And the game of Monopoly didn't
end as well as I wanted it to. But at this point in time, Iris uh,
more than likely, I mean, this is, this is public knowledge
approaching creditors for the 60 day extension there. That just
signifies pain, right? And when pain is there, and the the Pain
reliever is knocking on your door, sometimes you answer. Phil
Totaro: And, and just keep in mind what's going on in the Brazilian
market at this point and, and potentially why they're, they're in
this situation. You know, they had orders with a number of
different manufacturers, and those manufacturers have pulled back
or pulled out of the market entirely. And the order book that
they've got in Brazil is robust, but a lot of it's very far in the
future. So it's, it's making for a bit of a short term challenging
situation for them. And there are potentially several outlets they
can avail themselves of to you know, to get back to a strong
financial picture. And, and the Brazilian market, frankly, really
needs to get back to, uh, you know, to doing more auctions and, and
tenders for you know, additional power offtake. And, and really
start. Getting back on the horse. Allen Hall: Vestas has secured
over 6, 000 megawatts in new orders during the fourth quarter of
2024, spanning multiple continents. Now the U. S. is a big landing
spot for a number of Vestas turbines and Europe also. So Vestas is
spreading its wings a little bit. 1000 megawatts is a pretty
substantial total. It's not the highest they've ever had in a
particular quarter, but it is a strong quarter for Vestas, right,
Phil? Phil Totaro: Yeah, and it totals out to with the addition of
all their offshore sales or order book that they took in 2024 to
about 16 gigawatts. For the whole year, so it's a, it's a pretty,
you know, decent, you know, slate of orders where, you know, in the
U. S. in particular, they, they've got a bunch of new orders for
the V163 4. 5 which really seems like that's starting to take off.
We've calculated they've got about 2. 8 gigawatts worth of order
book now for that turbine globally. With a bunch more that we're
expecting to be announced here in, in 2025. So, you know, they're,
they're doing pretty well with a brand new product platform and
certainly their, their offshore orders as well for the V236. Joel
Saxum: Something to keep in mind with Vesta is when you see these
new order numbers coming out from them, one of their strategic
standpoints, they're going to is to offer service packages with
these turbines. So depending on geography and where they're at,
some of these come with a 25 year FSA. So that is a lot more booked
revenue for the future for them. That being said, since the new
year, their stock is up about 6%. That looks good on Vestas.