MPower Group Signs $19M Deal to Exit Renewable Energy Sector

A Strategic Exit from Renewable Energy

MPower Group Limited (ASX – MPR), a specialist in renewable energy and battery storage solutions, has announced a significant development with the sale of its core renewable energy business to Wollemi Energy Group Pty Limited. The binding agreement, valued at approximately $19 million in cash, encompasses MPower’s renewable energy platform, the Lakeland Solar & Storage Project, and a pipeline of development opportunities.

This transaction represents a major pivot for MPower, which has historically focused on delivering on-grid and off-grid power solutions across Australia. The sale is the culmination of an extensive capital search process, with Wollemi emerging as a partner whose risk appetite and strategic alignment matched MPower’s ambitions.

Operational and Financial Implications

All MPower employees are set to be offered employment with Wollemi, ensuring continuity of expertise and operational knowledge. The sale price is payable mostly at completion, with $2 million deferred for six months post-completion, subject to agreed terms. Completion is anticipated in August 2025, pending several conditions including contract novations, employee agreements, and the re-energisation of the Lakeland project, which has been offline due to a transformer fault since May.

Financially, MPower expects to clear all liabilities and retain surplus cash estimated at $3.8 million, translating to net assets of approximately 1.1 cents per share. The company reported net cash outflows of $304,000 for the quarter ending June 2025, with limited cash runway until the sale closes. Post-transaction, operating cash flows will cease, and ongoing costs are expected to be minimal.

Looking Ahead – Capital Returns and New Opportunities

With the sale proceeds, MPower plans to repay lenders and creditors in full. The company has outlined several potential paths forward – returning capital to shareholders through buybacks, capital reductions, or liquidation; pursuing a new business acquisition via a backdoor listing; or a combination of these strategies. This flexibility signals a readiness to redefine its corporate identity and shareholder value proposition.

Meanwhile, the Lakeland Solar & Storage Project remains a critical asset, with repairs underway and re-energisation expected to satisfy Wollemi’s conditions for completion. The Faraday Renewable Energy Project, excluded from the sale, faces challenges due to increased connection costs, with its future under review.

Conclusion

MPower’s sale to Wollemi marks a transformative moment, shifting the company away from direct renewable energy operations toward a new strategic chapter. Investors will be watching closely how MPower deploys the sale proceeds and whether it can successfully navigate its next phase, balancing capital returns with potential new ventures.