Netherlands-based Sif Group, an offshore foundation for wind turbines and oil & gas platforms, announced on Monday, February 13, that it has raised €328M to strengthen its position as the leading supplier of foundations for the energy transition.
Established in 1948, Sif evolved from being a manufacturer of large, thick tubular steel constructions to a provider of end-to-end solutions for offshore wind monopile foundations.
In the Netherlands, the company employs about 600 people (about 50 per cent of whom are paid employees) at two production facilities in Roermond and Maasvlakte 2 near Rotterdam. Since May 2016, Sif has been listed on the Euronext Amsterdam.
Transaction Overview
The funding comes from a combination of €100M advanced factory payments from launching customers (including Ecowende), €50M preferred equity from Equinor and €50M common equity raised through a rights offering by Sif’s largest shareholder Egeria at €11.50/share.
In addition, €40M in operational leases and €81M in term loans will be provided by Invest-NL and a consortium of commercial banks, with the remainder being funded through cash and cash equivalents.
Invest-NL provides €64.8M
The Amsterdam-based private company financed with public funds, Invest-NL, has backed Sif with a €64.8M term loan. This is by far Invest-NL’s largest funding to date.
Rinke Zonneveld, CEO at Invest-NL, says, “Sif is a prime example of the new green industry, the kind of company that paves the road to a carbon-neutral economy. Given its track record and ambition, it plays a vital role in the energy transition that is needed to help us build The Netherlands of tomorrow, especially when it comes to offshore wind.”
Invest-NL aims to make the Netherlands more sustainable and innovative. The government (Ministry of Finance) is the company’s shareholder, but Invest-NL decides which companies it will or will not finance.
Capital utilisation
Sif says it will use the funds to construct the world’s largest monopile foundation manufacturing plant in Rotterdam, the Netherlands.
The improved manufacturing plant will enable Sif to produce the equivalent of 200 XXXL, 11-metre-diameter, 2,500-ton reference monopile foundations annually, raising its total annual production capacity to 500 kilotons.
The construction is set to begin in April 2023, with initial production operations anticipated to start in the second half of 2024.
Fred van Beers, CEO of Sif, says, “We will strengthen our absolute global leadership position as monopile foundations solutions provider, enhance our innovative skills and create long-term value for all our stakeholders with a clear growth path in an accelerating global offshore wind market.”
“An important basis for the plan is the responsibility taken for safety and sustainability in building the facility as well as the design and operation of the production process. Therefore we see it as our role to make sure appropriate financing arrangements are in place, next to our investments in breakthrough innovations,” adds Van Beers.
EBITDA of €135M in 2025
After the expanded production plant is completely ramped-up, Sif forecasts EBITDA of €135M in 2025 and of at least €160M per year starting in 2026. The payback period as a result is 3 to 4 years.
A total of 348 kilotons of output have been committed by two launch customers, including Ecowende – a joint venture between Shell and Eneco, bringing the total orderbook to 662 kilotons at this time.
According to a statement from Sif, a long-term capacity reservation framework agreement with Equinor is in place, and talks for a second such arrangement are ongoing. These agreements also enhance the company’s long-term financial condition.
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