Simec, a member firm of GFG Alliance, has announced that it will pay Simec Atlantis Energy £5 million to “extricate” itself from a deal to buy a Highland hydro firm.
The payout all but scuppers Simec Atlantis current proposed £124.7m takeover plans for Green Highland Renewables (GHR).
But the firm’s boss claimed the deal is “not over” but does need to be “restructured”.
The deal will also see Simec, a shareholder in Simec Atlantis, provide a loan to the energy firm to fast-track work at the Uskmouth power plant, which it bought in November.
Tim Cornelius, Simec Atlantis Energy’s chief executive, said: “What’s occurred is that we were going down one path of acquiring GHR and now we’re looking at a different way to restructure that.
“We had entered into an exclusive agreement to buy that, so in order to extricate ourselves from the exclusive agreement we’ve received £5m cashback and they’re providing funding because were fast-tracking our big Uskmouth project.
GHR has dozens of hydro plants across the north of Scotland, and was bought by the GFG Alliance, owned by the billionaire Gupta family, in November 2017.
Simec Atlantis, the firm behind the pioneering MeyGen tidal project, is also associated with GFG, which took a 50% stake in it in 2017.
Mr Cornelius confirmed yesterday that his firm are still strongly in the hunt to acquire GHR.
But did concede it would delay the deal.
He said: “There will be further announcements to come on what the new transaction structures look like.
“The GHR deal in itself is not over; it’s just going to come back in a different structure.”
Jay Hambro, chief executive of Simec Energy, added that his firm “firmly supports” Simec Atlantis and “believes these arrangements are a win-win for all parties involved”.