Babcock & Brown Limited (BNB) and joint venture partner Babcock & Brown Wind Partners Group (BBW) sold a portfolio of wind farms in Portugal to a consortium of investors led by Magnum Capital for an Enterprise Value of about 1.15 billion euros ($2.25 billion). The portfolio comprises approximately 515MW of operating wind farms and a further 156MW of wind farms under construction.

The sale was effective immediately and the companies said settlement had occurred.

Babcock & Brown said its $285.82 million net proceeds from of its share of the portfolio represented a price above book value and would be used to pay down project debt secured against European wind assets.

Babcock & Brown said it had retained ownership of its other wind interests in Portugal, which included 123MW of projects under construction, 38MW of projects under development and its interest in the Ventinveste wind tender consortium.

Babcock & Brown said it would continue to develop and construct these assets and would look to sell them at an appropriate time.

"Negotiations on the sale of Babcock & Brown wind energy assets in France, Greece and Germany remain ongoing," BNB said in a statement.

Meanwhile, BBW said its 50% interest in the Enersis Portfolio comprised 257MW of operational wind farms and 78MW of wind farms under construction, representing about 13% of BBW’s total wind energy portfolio.

"The sale has resulted in an estimated loss after taxes, costs and foreign exchange gains of $11.7 million," the company said.

"BBW's debt will be reduced by approximately $718 million being the 50% interest in the Enersis Portfolio debt facilities. BBW will receive net cash proceeds of approximately $274 million."

BBW said the net cash proceeds would be initially applied towards an on-market buy-back of BBW's securities.

"It is the boards' expectation that the buy-back will be highly accretive at current security prices," BBW said.

CEO Miles George said the transaction achieved a substantial reduction in BBW’s debt, provided increased financial flexibility and enabled a buy-back of BBW securities to enhance securityholder returns.

"In conjunction with the sale of BBW's interest in the Enersis Portfolio, the Boards re-confirm both the previously announced FY09 distribution guidance of at least 9c per security and medium term distribution targets," he said.

"The FY09 distribution is expected to be fully tax deferred and paid from net operating cash flow after actual debt repayment."

On Friday, BBW closed down 0.5c at 79.5c, while BNB was down 7.5c at 48c.