Simec Energy is to sell its Uskmouth power plant in Newport, South Wales, to Atlantis Resources. Completion is expected in Q1 2018.

Atlantis wants to “build a diversified renewable energy company of scale”. It plans to convert the 220MW Uskmouth plant to use an end-of-waste energy pellet that would otherwise go to landfill as fuel. Commercial operation is planned for 2020. Power from the converted plant will be purchased by GFG’s industrial businesses under a 20-year power purchase and fuel supply agreement.

Atlantis, which will be renamed Simec Atlantis Resources, said this was likely to be the first in a series of such deals  – it now has the right of first offer on a portfolio of renewable power generation assets currently owned or subsequently acquired by the GFG Alliance.

The deal is classed as a reverse takeover under AIM rules. The consideration will be in new Atlantis ordinary shares and Simec will acquire a 49.9% stake in Atlantis.

Atlantis staid the deal would underpin GFG’s  low-carbon Greensteel strategy, which follows GFG’s £300 million investment in the Liberty Steel Newport site.