Research on Star Energy Group PLC (STAR:LON) from Longspur Clean Energy
Star Energy has signed an agreement to sell its Croatian geothermal subsidiary to Enna Geo in a transaction that crystallises a strategic refocus on the group's core UK oil, gas and geothermal business. The consideration comprises initial cash of €1.5m (Star's 71% share: €1.3m) plus a contingent earn-out of up to €1.5m tied to commercial operation of power plants on each of the three licences. The subsidiary was loss-making and had continued capex requirements for this year and the Croatian government's delay in announcing a premium geothermal price tariff was a key catalyst for exit. Completion is expected in H2 2026 and will release €5.2m of restricted cash while removing future capital commitments, materially strengthening balance-sheet flexibility and allowing Star to focus on its domestic opportunities. We have adjusted our central case valuation to reflect the removal of the Ernestinovo development, with this moving to 41p.