TIDMNESF
RNS Number : 6161I
NextEnergy Solar Fund Limited
12 August 2019
12 August 2019
NextEnergy Solar Fund Limited
("NESF" or "Company")
Issue of Second Tranche of Preference Shares
-- The Company has entered into a Subscription Agreement with an
investment vehicle owned by Universities Superannuation Scheme,
namely L1 LP ("USS" or the "Investor").
-- 100,000,000 preference shares to be issued ("Preference
Shares"), raising gross proceeds of GBP100m (the "Issue").
-- Net proceeds to be used to repay the existing GBP90m
short-term debt facilities and invest in the pipeline of
opportunities.
-- The rights of the Preference Shares are the same as those
issued in November 2018, save that the Preference Shares to be
issued to USS benefit further from certain additional undertakings
and covenants given by the Company in the Subscription
Agreement.
Further to the newly granted authority to issue up to
100,000,000 Preference Shares passed by its shareholders at the
Company's general meeting on 8 August 2019, NESF is pleased to
announce the issue of a further 100,000,000 Preference Shares at
100p per share, to be completed on or around 12 August 2019.
The Board believes that the principal benefits of the Issue
are:
1. the subscription proceeds will be applied promptly to repay
existing short-term debt facilities (GBP90m due in February 2020
and July 2020), removing any short-term refinancing risk, with the
balance of the net Issue proceeds being available to invest in
pipeline opportunities, most of which are subsidy free;
2. the fixed preferred dividend of 4.75 pence per preference
share is a lower annual cash cost to the Company compared to
issuing ordinary shares (2019/20 target dividend of 6.87 pence per
ordinary share, expected to increase with RPI annually);
3. the Issue allows the Company to further optimise its capital
structure and increase cash flows compared to refinancing with
conventional long-term amortising financing, thereby increasing the
cash dividend cover and increasing the levered IRR for ordinary
shareholders;
4. the Company has an unilateral option to redeem all or part of
the Preference Shares at any point after 1 April 2030; and
5. the Preference Shares are not redeemable for cash by USS,
other than in the event of a change in control or delisting of the
Company.
The rights of the Preference Shares are the same as those issued
in November 2018, save that the Preference Shares to be issued to
USS benefit further from certain additional undertakings and
covenants given by the Company in the Subscription Agreement. The
following is a summary of the key terms of the Subscription
Agreement:
1. The Company has undertaken that, on issue of the Preference
Shares and following the Issue, certain gearing ratios (calculated
on the basis of Gross Asset Value ("GAV") and Enterprise Value
("EV") of the Company in accordance with the Subscription
Agreement) will not exceed 50 per cent and that the Company will
not issue any further Preference Shares or incur any further
borrowings where such issue and/or borrowings would result in these
ratios being exceeded.
2. The Company has granted the Investor certain protective
covenants with respect to the undertaking of share buybacks or
declaration of dividends payable to the ordinary shares, in
particular in circumstances where the relevant gearing ratio would
exceed 70 per cent or, following the Preference Shares becoming
convertible in April 2036, 50 per cent in circumstances when the
ordinary shares are trading at a discount to NAV over a six month
period and, despite the Investor obtaining an independent valuation
demonstrating a lower than published NAV, the Company has not taken
steps to adjust its NAV.
3. The EV gearing ratio is not applicable until April 2030 or if
the ordinary shares have traded at an average discount of more than
10 per cent in the preceding three months from April 2025.
4. In addition to voting rights relating to any changes to the
Company's investment policy, certain adjustments will be made to
the calculation of the gearing ratios in the event of the Company
increasing its exposure to non-solar PV assets and any integrated
ancillary technologies and/or non UK and OECD market risks have
also been provided to the Investor.
5. In addition, to the extent the Company seeks external third
party debt funding on certain terms, the Investor will have the
right to match these financing terms, subject to the conditions and
criteria set out under the Subscription Agreement.
The Preference Shares carry a fixed preferred dividend of 4.75
per cent per annum as well as a preferred capital entitlement of
100p per share (their issue price) and are generally non-redeemable
and non-voting. Preference Share dividends are payable at the
discretion of the Board and, to the extent that any dividend is not
paid in full on the relevant payment date, the unpaid amount shall
compound at 4.75 per cent per annum (calculated daily) until paid.
The Preference Shares have no redemption or voting rights in the
event of unpaid dividends. From 1 April 2030, the Company has the
right to redeem all or some of the Preference Shares at 100p per
share. From 1 April 2036, the Preference Shareholders have the
right to convert all or some of their Preference Shares into either
ordinary shares or B shares, at the election of the holder, with B
shares being unlisted shares carrying the same rights to dividends
and return of capital in a liquidation as the ordinary shares. The
conversion price will be based on the ratio of the preferred
capital entitlement (plus unpaid dividends, if any) per Preference
Share relative to NAV per ordinary share at the date of conversion.
The Preference Shares may be redeemed in full at the election of
the holders in the event of a delisting or change of control of the
Company.
For further information:
NextEnergy Capital Limited 020 3746 0700
Michael Bonte-Friedheim
Aldo Beolchini
Cantor Fitzgerald Europe 020 7894 7719
Robert Peel
Shore Capital 020 7408 4090
Anita Ghanekar
Macquarie Capital (Europe) Limited 020 3037 2000
Nick Stamp
MHP Communications 020 3128 8100
Oliver Hughes
Apex Fund and Corporate Services (Guernsey) Limited 01481 735 827
Nicholas Robilliard
Notes to Editors:
NESF is a specialist investment company that invests primarily
in operating solar power plants in the UK. It is able to invest up
to 15% of its Gross Asset Value in operating solar power plants in
OECD countries outside the UK. The Company's objective is to secure
attractive shareholder returns through RPI-linked dividends and
long-term capital growth. The Company achieves this by acquiring
solar power plants on agricultural, industrial and commercial
sites.
As at 30 June 2019, NESF has raised equity proceeds of GBP692m
(including GBP100m of Preference Shares) since its initial public
offering on the main market of the London Stock Exchange in April
2014. The Company's subsidiaries have bank and other external
finance outstanding of GBP289m, on a look-through basis and
including at project level. Of this, GBP199m was long-term fully
amortising financing, and GBP90m was drawn under a short-term
credit facility.
NESF is differentiated by its access to NextEnergy Capital Group
(NEC Group), its Investment Manager, which has a strong track
record in sourcing, acquiring and managing operating solar assets.
WiseEnergy is NEC Group's specialist operating asset management
division and over the course of its activities has provided
operating asset management, monitoring, technical due diligence and
other services to over 1,300 utility-scale solar power plants with
an installed capacity in excess of 1.9 GW.
Further information on NESF, NEC Group and WiseEnergy is
available at nextenergysolarfund.com, nextenergycapital.com and
wise-energy.eu.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
STRLLFFSTVIAIIA
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August 12, 2019 02:00 ET (06:00 GMT)
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