Product supplier blames slow uptake of government’s renewable heat subsidy scheme for sale
Construction products firm SIG has sold its renewable energy business for £1 after “slow uptake” of the government’s renewable heat subsidy scheme.
In a statement to the City this morning, the firm said it had sold its 51% stake in Ice Energy Technologies, which specialises in supplying and servicing ground and air source heat pumps, to the firm’s existing management for £1.
SIG said it would incur an exceptional charge of around £8m as a result of the sale, £3.3m of which had already been recognised in the firm’s results in the six months to 30 June 2014.
The deal could see SIG get an additional £5m from the buyers subject to the firm’s performance up to 31 March 2019.
SIG said Ice Energy Technologies had experienced “challenging market conditions resulting from delays to, and the subsequent slow uptake of, the UK government’s Renewable Heat Incentive (RHI) scheme”, which pays people for the heat that they generate from renewable technologies.
The sale follows the disposal of SIG’s Green Deal assessor and installer business for £1 in April.
That was a move it said it had made because of a “lack of traction” in the flagship retrofit scheme’s first year.
It said that sale was likely to cost it around £13m in its 2014 accounts.