Thursday, February 29, 2024

North Star raises £140m investment to build next wave of renewables fleet including £50m from Scottish National Investment Bank

North Star has secured a £140million financing package to support the next phase of its ambitious offshore wind growth plan as it looks to broaden its position as the UK’s leading service operations vessel (SOV) operator and seize new opportunities in Europe. 

The investment includes a £50million commitment from the Scottish National Investment Bank (The Bank), as well as IFM Investors, Edmond de Rothschild’s BRIDGE, and RBC Capital Markets.

The Bank’s investment aligns with its mission to support Scotland’s transition to net zero, allowing the continued expansion of offshore wind projects in the North Sea by addressing recognised demand for SOVs and commissioning service operations vessels (CSOVs).

North Star, which is owned by Partners Group, a leading global private markets firm acting on behalf of its clients, has bases in Aberdeen, Lowestoft and Newcastle, and has been operating in the North Sea for 135 years. Its 1,300-strong workforce currently manage and operate 42 offshore support vessels providing critical safety services to over 50 UK Continental Shelf installations 24hrs a day, all year round.

The firm entered the offshore wind market last year after winning all four long-term charter SOV awards for the highly competitive Dogger Bank Wind Farm. These four vessels will be delivered from 2023, financed by a £127million project facility secured from Allianz Global Investors last year. SOVs provide accommodation for wind technicians and access to equipment while working in field. North Star’s state-of-the-art ships utilise hybrid-power, dynamic positioning (DP), AI and machine learning technologies.

“We have a 40-year track record of reliable marine operations, 15 years of DP experience operating close to clients’ assets, and proven expertise in overseeing numerous concurrent shipbuilding projects. Raising this level of corporate funding from The Bank and other investors, as well as the ongoing backing of Partners Group, provides us with the means to continue to add to our growing vessel fleet and supports our ambition to be a leading player in the European SOV market.

“The £140million secured today secures the capital required for us to continue our newbuilding programme in the year ahead, whilst providing us with the flexibility to continue to expand these facilities to meet our strategy of 40 new SOVs by 2040.”

North Star chief strategy officer Fraser Dobbie

“The Bank is catalysing support for Scotland’s offshore wind supply chain by enabling companies like North Star to increase focus on providing vital services for offshore wind farms and in supporting their transition to net zero.

“This follows our investment in the Port of Aberdeen, which will continue to act as a hub for North Sea offshore services and, increasingly new offshore wind farms, through its South Harbour expansion.”

Jimmy Williamson, Scottish National Investment Bank executive director

“Offshore wind forms part of our thematic focus on decarbonization and we see mission-critical infrastructure support services, such as those provided by North Star, as a high growth subsector. We look forward to partnering with North Star and the group of lenders on its transformational growth plans in the offshore wind sector.”

Kevin Gilhawley, member of management, private infrastructure Europe, Partners Group

The deal was supported by an advisory team including RBC Capital Markets, Allen & Overy, Clifford Chance, Blackwood Partners, Shepherd & Wedderburn and PwC.

About North Star:  

North Star is the market leading UK provider of mission critical, offshore infrastructure support services to offshore wind and offshore oil and gas markets

The firm has bases in Aberdeen, Lowestoft and Newcastle, employs 1,300 crew and onshore personnel, and has been supporting the energy sector for the past four decades. Its offshore infrastructure support vessel fleet boasts 41 assets and provides continuous around the clock support services to more than 50 North Sea installations. The company has four Service Operations Vessels (SOVs) for the offshore wind market under construction, the first will be delivered to the UK in Q1 2023.

The 135-year-old business, which was originally established to support the fisheries industry, is also the country’s largest employer of offshore cadets. Since 1996, it has trained hundreds of future deck and engineering trainees, investing £1million annually on average to develop the next generation.

By combining safety, service and quality, the company delivers exceptional levels of support to its clients in one of world’s most challenging and demanding industries.

About The Bank:

The Scottish National Investment Bank is Scotland’s first development investment bank, wholly owned by the Scottish Ministers on behalf of the people of Scotland.

The Bank is an impact investor, focussed on delivering both commercial returns and mission impacts with its investments.  The Bank is a PLC and operationally independent from the Scottish government.

The Bank invests in businesses and projects connected to Scotland to deliver long term, patient debt or equity investment where the private market is failing to provide the support businesses and projects require to grow.  

The Bank’s missions are:

  • Supporting Scotland’s transition to net zero
  • Building communities and promoting equality
  • Harnessing innovation to enable our people to flourish

The Scottish Government has committed to capitalising the Bank with £2bn in its first 10 years.  Over time as the Bank’s initial investments are repaid, the Bank will reinvest those funds in businesses and projects creating a perpetual investment fund to support the Scottish economy in the long term.

The Bank was established in November 2020.

About Partners Group:

Partners Group is a leading global private markets firm. Since 1996, the firm has invested over USD 185 billion in private equity, private real estate, private debt and private infrastructure on behalf of its clients globally. Partners Group seeks to generate superior returns through capitalizing on thematic growth trends and transforming attractive businesses and assets into market leaders. The firm is a committed, responsible investor and aims to create sustainable returns with lasting, positive impact for all its stakeholders.

With over USD 131 billion in assets under management as of 30 June 2022, Partners Group provides an innovative range of bespoke client solutions to institutional investors, sovereign wealth funds, family offices and private individuals globally. The firm employs more than 1,600 diverse professionals across 20 offices worldwide and has regional headquarters in Baar-Zug, Switzerland; Denver, USA; and Singapore. It has been listed on the SIX Swiss Exchange since 2006 (symbol: PGHN).

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