BUILDING Services company Northern Bear has secured a £10m investment as it diversifies with the launch of a solar panel roof installation scheme.
The Chester-le-Street based business says it will be the first scheme of its kind in the North East and if successful will open the door to at least a further £20m of funding.
After months of negotiations chief executive Graham Forrest was due to announce its partnership with renewable energy investment fund London-based Hazel Capital to the stock market.
Using its four North East roofing businesses Northern Bear will fit solar panels on domestic and commercial properties across the region.
Forrest said it is close to securing a deal to install solar panels on one of the region’s iconic buildings and says the potential across the North East’s commercial buildings and housing stock is enormous.
He said: “Our strategy has developed over the last 12 months. During that time we have divested three of our businesses as we prepared ourselves for this exciting new development.
“The potential in the solar power market is huge. There is very little solar presence in the North East and we are the first company to approach this market in such a way. We have the fire power from the first tranche of investment to make substantial inroads and have access to at least a further £20m, and then possibly more.”
Northern Bear floated on the AIM market in 2006 and in the ensuing years built up a portfolio of 13 companies in the building arena.
It based its business model on allowing the individual businesses to maintain their own well-known, and trusted names, while benefiting from a centralised back office function.
However the business like all construction-facing operations faced challenges during the recession which led to Northern Bear off-loading three of its portfolio in the last year. In May it sold The Roof Truss Company (Northern), in April it sold Hastie Burton and in September it sold plumber DJ McGough back to its founders.
However Forrest believes it has now turned the corner and this latest deal will offer exposure to some significant business opportunities.
Hazel Capital was established in 2007 and invests exclusively in green energy schemes. It has secured German contractor RGE Energy as its partner supplier with Northern Bear contracted as the installer of the roof-top systems. Forrest said: “Hazel believes there are great opportunities in offering sustainable products for the North East market. We have four roofing businesses in the region and we currently install over 4,000 roofs in the North East every year.”
Solar power installations in the UK benefit from last year’s introduction of the Feed-In Tariff system which sees the Government pay 43p for every kilowatt hour of electricity generated.
The deal will see Hazel pay Northern Bear for the installation, and maintenance of the panels for 25 years, with Hazel taking the FIT. The end user benefits from free electricity when the sun is shining or, even on cloudy days, power can be generated.
