Major North East employer Hargreaves Services Plc has revealed it is spinning out its renewable energy business, in a move senior management hope will eventually create another listed company headquartered in the North East.
The County Durham business, which employs more than 2,000 people, has traditionally operated in the coal mining and logistics sectors but has branched out into property and development in recent years.
Now the business is in the process of selling Brockwell Energy Limited, a renewable energy firm created last year to focus on the development of onshore wind farms, energy from waste facilities, and flexible gas generation projects.
Negotiations are now in place to sell off the
Team Valley -based business with a deal expected to be finalised in the coming months.
Gordon Banham, chief executive of Hargreaves Services, said: “We have announced that we are spinning our energy business out to other investors who are hopefully going to back it to build it out.
“That is great for Hargreaves as we will get back rental income from the wind farms and it is great for Hargreaves employees as they have moved into that business. I can see it being listed as a new energy business in the North East.
“If I get my way there will be Hargreaves, and in three to four years there will be another listed company that will be Brockwell.”
It is unknown which investors are interested in acquiring Brockwell, but Mr Banham confirmed there are six interested parties involved in the negotiations.
Hargreaves is expected to keep a minority stake in the energy firm after its sale is completed.
Hargreaves’s property business will continue to benefit from the activities of Brockwell through the collection of rental payments.
The announcement was made in the company’s interim financial results, which showed turnover for the six months ending November 2017 fell by almost £20m to £150.3m. The companies underlying operating profit increased from £2.1m in 2016, to £2.3m.
However, the firm made an operating loss of £2.7m, largely due to exceptional charges of £2.8m.
The charges relate to onerous contracts inherited by Hargreaves when it acquired earthworks firm CA Blackwell.
All three onerous contracts are expected to be completed by April 2018, and the company has said it may recuperate some of the charges through existing warranties held on the projects.
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