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BALTIMORE-Locally based Municipal Mortgage & Equity has agreed to sell its renewable energy business for $19.7 million to a subsidiary of Fotowatio S.L. The subsidiary, called MMA Renewable Ventures, develops, finances and operates solar, wind, biomass and energy efficiency projects. With the purchase agreement now signed, Fotowatio made an advance payment to MuniMae of $1.5 million, which will be applied to the final purchase price. MuniMae did not return a call to GlobeSt.com in time for publication.

The sale is structured to occur in two separate closings. The first closing will cover core assets, the pipeline of potential future transactions and MuniMae’s interests in its Solar Fund III, with an additional payment of $13.6 million. The second closing will cover the remaining assets and the balance of payment, which will be subject to possible purchase price adjustments if MuniMae exercises a right to retain certain assets.

Total MMA Renewable Ventures transaction production in 2008 was $115 million, down from $234 million in 2007. In a prepared statement, CEO Michael L. Falcone says the clean energy business has strong long-term growth potential, but that because of the difficulty raising capital in the current market environment MMA’s renewable energy production was decreasing. “The capital needs of the business, coupled with our need to address corporate liquidity concerns make this a prudent time to sell the business,” he explains.

Indeed, MuniMae has been struggling with the credit crunch for more than a year now. It was delisted by the New York Stock Exchange last year; shortly after it began evaluating strategic alternatives. Then, last fall it sold its agency loan operations to Oak Grove Commercial Mortgage LLC, a newly formed subsidiary of Mud Duck Equities LLC.

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