TFC may try again to buy Ascendant

  • Energy investment: Belco is building a new power plant in Pembroke to replace ageing generators, a project costing more than $100 million (Photograph by Akil Simmons)

    Energy investment: Belco is building a new power plant in Pembroke to replace ageing generators, a project costing more than $100 million (Photograph by Akil Simmons)

  • Energy investment: Belco is building a new power plant in Pembroke to replace ageing generators, a project costing more than $100 million (Photograph by Akil Simmons)

    Energy investment: Belco is building a new power plant in Pembroke to replace ageing generators, a project costing more than $100 million (Photograph by Akil Simmons)

  • Interested: Joe Garcia of TFC Utilities

    Interested: Joe Garcia of TFC Utilities


Ascendant Group Ltd is considering putting itself up for sale — and one potential buyer has already revealed an interest.

Twenty First Century Utilities, the US company that had a bid for Ascendant turned down last April, would consider trying again if the company decides to seek a buyer.

Joe Garcia, senior adviser on TFC’s management team, told The Royal Gazette last night: “Yes, we are interested.

“We made a bona fide offer, based on the information that was publicly available. If the information provided in this process adds to that, we will again consider making an offer.”

Ascendant, the owner of power utility Belco, said in a statement yesterday morning that its board of directors has “begun a process of evaluating strategic alternatives, including the potential sale of Ascendant Group Ltd”.

Trading of Ascendant shares on the Bermuda Stock Exchange had earlier been suspended “pending an announcement” from the company.

In a statement, Ascendant said: “Among the range of alternatives we see ahead, the company, with the assistance of its financial adviser Guggenheim Securities LLC, is exploring the potential benefits that a new owner of Ascendant can bring to Bermuda — including greater access to capital for domestic investment and the infrastructure development expertise necessary to accelerate the next phase of Belco’s evolution.”

TFC offered $15 per share for Ascendant last April. The offer was flatly rejected by the Ascendant board, which a month later described it as “an unsolicited, highly conditional, expression of interest”. The statement added that “it is in the best interests of Bermuda and Ascendant’s customers, shareholders and employees, to continue to execute on its existing strategy”.

Since then, the company has begun construction work on the new North Power Station, a $107 million project to replace some of its ageing fleet of generators.

Also, strong public support for greater use of renewable energy sources than is envisaged by Belco emerged, when the Regulatory Authority sought feedback on alternative visions for the future of electricity in Bermuda.

Belco favours using liquefied natural gas as a principal fuel for electricity generation. An alternative vision submitted by BE Solar entails a more aggressive shift to renewable energy sources, and received the most support during the RA’s consultation period that ended last November. The plan included an offshore wind farm.

Ascendant said yesterday: “With respect to regulation, the mandate is to lower rates through increased competition in electricity generation, as well as to ensure renewables play a larger role in the island’s energy mix.

“Renewable energy is the future, but there is currently a gap between that future and today’s need for reliable and affordable energy.”

After TFC’s bid for Ascendant was turned down last year, Mr Garcia, a former US Congressman who has served on America’s National Association of Regulatory Utility Commissioners, said the firm’s approach was based on investing in energy efficiency and renewables, creating a decentralised grid that was shaped by the preferences of customers.

Another of those involved with TFC’s bid was Dennis Lister, a strong advocate for green energy and the Speaker of the House of Assembly.

In explaining its decision to “evaluate strategic alternatives”, Ascendant said: “The company understands that its responsibility is to a broad group of stakeholders, including shareholders, customers, employees, and regulators.

“Each of these stakeholders brings to bear on the company a wide range of perspectives and expectations.

“Furthermore, the industry in which we operate is facing unprecedented change, and — with change — we must have the ability to explore and leverage new opportunities for the betterment of Bermuda.”

The statement added that Ascendant’s share price had risen from $5 to $17 over the past five years. The company has been aggressively buying back its own shares and last traded last week at $16.75.

“The market value remains well under book value,” the statement added.

“We know our Belco customers want lower rates and we are actively focused on reducing these through finding efficiencies in how we operate every aspect of our company.

“We have laid the groundwork for Bermuda’s energy future with flexibility at the forefront, so the island can pursue any energy mix that is appropriate.

“Current infrastructure improvements to the electricity system include replacement generators that will ensure a cost effective, reliable supply of energy for the foreseeable future, irrespective of any additional generation sources.

“Through the commitment and hard work of our employees, we are modernising the grid and installing advanced metering infrastructure island wide so that Bermuda can pursue the most advanced energy technology in the future.

“We are also mindful of the needs of our employees. As we strive to become more efficient, we are committed to balancing the needs of employees against the need to reduce electricity prices for our customers.

“We remain enthusiastic about the future prospects of Ascendant, to the benefit of all of our stakeholders.”

As well as Belco, Ascendant owns AirCare, iFM, a facilities management company, and iEPC, an engineering and construction business.

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Published Jan 29, 2019 at 8:00 am (Updated Jan 29, 2019 at 12:26 am)

TFC may try again to buy Ascendant

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