Hedge fund steps up pressure on Airtricity owner SSE over wind farms

The 169MW Galway Wind Park, co-developed by SSE and Coillte in Connemara’s Cloosh Valley, is  Ireland’s largest wind farm, generating more green energy than any other wind generation site on the island.

US hedge fund Elliott has stepped up the pressure on SSE for the Irish and British electricity retailer and generator giant to spin off its wind farms and other renewables. 

In Ireland, SSE owns Airtricity which is a major retailer and generator into the all-Ireland power market, with 28 onshore wind farms producing 720 megawatts across the island. In the Republic, Airtricity co-owns the Galway Wind Park with Coillte.  

Elliott has long been seeking big changes at SSE and has significant clout in being the fifth largest investor at the London-listed firm.       

In a letter sent on Tuesday, the US hedge fund criticised SSE for what it said was the firm's "disappointing share price" in recent times, and claimed that by spinning out and listing its renewables unit it could unlock value for SSE shareholders of £5bn, Elliott claimed.  

"Given the company’s failure to put forth a comprehensive vision for how it can remedy its underperformance, Elliott challenges SSE to provide a detailed and credible plan to address investor concerns around SSE’s corporate governance, its ability to fund its growth in the long term, and its persistent undervaluation," Elliott said in the letter.

Shareholder activists like Elliott targets stock market-listed firms that it thinks is undervalued for one reason or another by the market. 

Energy firms in the current climate are particularly vulnerable as prices rise amid the global energy crunch, and for the potential for renewables to supply cheap energy. 

In response, Scotland-based SSE said it had been holding “constructive and supportive” discussions with investors since its strategy announcement.

The shares were little changed on Tuesday but have risen almost 3% since the company’s strategy update late month and have gained almost 9% this year.

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