Who is Bute Energy
Formation - the company was formed on 20/02/20 as RSCO 3750. The name was changed to Bute Energy on 13/03/20. On the same date the original Bute Energy Ltd formed on 20/09/18 changed its name to RSCO 3750. The purpose of this name swap was apparently to distance the company from an earlier connection with the Hendy Wind Farm.
Ownership - (see ownership chart below) 88% of the company is effectively owned by Oliver Millican 42, a Scottish property developer through his holding company Windward Global. The remaining 12% is owned by his co-directors Stuart George 36 and Lawson Steele 38
External investors - In February 2022 Copenhagen Infrastructure Partners (CIP), a Danish fund management group, announced a partnership with Bute Energy whereby their Danish fund CI IV ks would invest in Bute’s onshore wind and solar projects in Wales. Investment by CI IV was directed through a UK subsidiary CI IV Dragon Holdco with development loans being made by its subsidiary CI IV Dragon Lender under a secured loan agreement. On 2/11/2023 the shares of CI IV Dragon Holdco Ltd was transferred to a new Luxembourg fund, Copenhagen Infrastructure V scsp
The Energy Parks - 22 energy park companies were originally incorporated in 2021/2 with Bute Energy Cambria (BEC) as the sole shareholder and OM, SG and LS as directors. In March 2022 11 of the energy parks and Green Generation Energy Networks Cymru were acquired by Bute Energy Development Holdings (BEDH) from BEC for £24m financed by loans from CI IV Dragon Lender. At the same date one £0.01 B share in each energy park and Green Gen Cymru was allotted to CI IV Dragon Holdco and 3 representatives of Copenhagen Infrastructure Partners were appointed as additional directors to each of their boards. On May 13th 2024 a change to the Person with Significant Control. was filed at Companies House by each of the Energy Park companies owned by BEDH. This filing which was backdated to March 14th 2022 removed the control of the appointment/removal of directors from BEDC. It is assumed given the backdating that this change related to their issue of the B share in each company on March 14th 2022 and that CI IV Dragon Holdco effectively has that control. The timing of this filing and the backdating suggests that this was related to the Ofgen consultation and concern over the separation of generator from “distributor”.
In April 2023 funding arrangements between the company and its external investor were revised and in July 2023 CI IV Dragon Holdco acquired call options from BEDH giving it the option to purchase the 99.9% of the shares in the energy parks not presently held by it on the commencement of construction.
Financial - the financial information available to the public on the group is presently limited to the published accounts to 31/3/23 and to other disclosures on the Companies House web site. Disclosure in the published accounts is also restricted by the use of small company and other exemptions where available. Notwithstanding these limitations the information that is available raises some concerns.
Loans - the group accounts for BEDH disclose that during the period from incorporation to 31/3/23 the company borrowed £53 million at 15% from CI IV Dragon Lender Limited, Apart from meeting group losses of £20M, £24 million of this was paid to BEC a related party (see above) to acquire 11 energy parks and Green Generation Energy Networks Cymru notwithstanding that at the date of acquisition the acquired companies had net liabilities of £3M. This transaction is reflected in the group accounts as goodwill of £27M less amortisation. The result of this transaction was to artificially increase the apparent value of the underlying assets (albeit at the cost of increased indebtedness) and to pass the proceeds to BEC. It is not possible to trace the proceeds of the sale in the accounts of BEC because of the small company exemption although it seems probable that these were in part passed through it to its parent, Bute Energy Limited, to cover brought forward losses and unblock a subsequent dividend payment to its parent Windward Energy Ltd.
Revaluation - on 25/07/23 the assets of BEDH were revalued upwards by £190m.The revaluation reserve was capitalised and applied to the issue of a deferred share of the same value. The deferred share was cancelled 3 days later and the amount arising attributed to the company’s distributable reserves. It is apparent that this transaction was simply an artificial device to circumvent Company Law on revaluation reserves by restating these as distributable. The effect of this was to present the company’s finances in a more favourable light and allow the payment of future funds upwards through the group notwithstanding b/fwd losses. No details have been given by the company on the basis of the valuation or name of the valuer but in the absence of any planning permissions or other information it was presumably based on hope value. Bute are curiously shy about the valuation - its existence only emerged after a probe by Companies House initiated by the writer and the post balance sheet note in the accounts dealing with the transaction refers to the deferred share but makes no mention of the valuation.
The Wales Pension Partnership representing council employees in Wales have confirmed that they will invest £68 million in development loans to Bute Energy on certain progress being achieved. As at January 2024 £18.6M had been loaned under this agreement (FOI request). Following due diligence enquiries Powys CC have declined to join this investment.
Community benefit - Despite investing heavily in PR through social media, events, sponsorship etc. principally in Cardiff and South Wales, the company’s reputation amongst many in the areas affected by its proposed developments is one of arrogance and misinformation. Its efforts to buy the goodwill of the local communities are centred around its community benefit programme however details released to date suggest that this is far from developed and little practical thought has been given to its geographical coverage, future administration and enforceability.
Summary - Bute Energy is controlled by one individual - Oliver Millican. Finance in the form of development loans is provided by a company controlled by an offshore Luxembourg venture capital fund. The exercise of call options acquired by the fund will result in the energy parks and Green Gen Cymru being acquired by the fund before the start of construction.