TIDMNESF
RNS Number : 8236E
NextEnergy Solar Fund Limited
23 October 2018
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT
FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE
REPUBLIC OF SOUTH AFRICA.
The information communicated in this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this information is considered to be in the public
domain.
LEI: 213800ZPHCBDDSQH5447
23 October 2018
NEXTENERGY SOLAR FUND LIMITED (THE "COMPANY")
Further re: Issue of Preference Shares, amendments to the
Company's articles of incorporation and investment policy
The Company today announces certain amendments to the proposals
announced on 16 October 2018 (the "Original Proposals"), under
which:
-- NextEnergy Capital IM Limited has agreed to waive a
proportion of the investment management fee due to it under the
investment management agreement, so that no investment management
fee is payable by the Company in respect of that part of the
Company's NAV attributable to Preference Shares (as reported in the
Company's financial statements from time to time); and
-- in recognition of the considerable time and resource that
NextEnergy Capital Limited and NextEnergy Capital IM Limited have
devoted to developing and implementing an innovative and attractive
new source of capital that materially improves the Company's
dividend cover and cash flow, the Company will pay NextEnergy
Capital IM Limited a one-off arrangement fee of 0.5% of the value
of each tranche of Preference Shares issued.
A supplementary circular will shortly be despatched to
Shareholders to inform them of the amended proposals (the "Amended
Proposals"). The details of the EGM set out in the Circular dated
16 October setting out the Original Proposals remain unchanged.
The Amended Proposals come following further consultation with
Shareholders, following consultations made prior to the Original
Proposals being made.
The Company, the Investment Manager and the Investment Adviser
continue to consider the issue of Preference Shares to have
material benefits for the Company when compared with other sources
of capital.
Details of the Amended Proposals
The information below restates, based on the Amended Proposals,
certain financial information set out in the Company's announcement
of 16 October 2018.
The application of the proceeds of the Preference Shares issued
pursuant to the Proposals to the financing of a typical UK solar PV
investment of the Company is expected to enhance the average
dividend cover for Ordinary Shareholders by 0.15x and increase the
levered internal rate of return ("IRR") by 1.09%. For comparison,
an issuance of long-term debt financing at current best market
terms is estimated to have an impact on the dividend cover and IRR
of 0.03x and 0.64% respectively.
In net present value terms, the proposed Subscription would
generate cash savings of GBP42.5m compared to issuing Ordinary
Shares as a result of the lower total dividend cost of the
Preference Shares over the period to 31 March 2036 (under current
2.75% long term retail price index ("RPI") estimates and using the
Company's unlevered discount rate of 6.75%). When compared to the
total debt service (principal and interest) of an illustrative
fully-amortising debt financing at best market terms, the lower
fully-costed cost of capital of the Preference Shares represents
cash savings of GBP25.9m in net present value for the Subscription.
This equates to total cash savings for the Company of GBP45.1m for
GBP100m of issued Preference Shares up to March 2036.
The proceeds of the Preference Shares will be used to repay
existing debt facilities whose average yearly cash cost at current
terms (comprising interest and principal amortisation) ranges from
8.6% to 10.3% and that can be voluntarily terminated without
incurring prepayment penalties. Namely those advanced by Santander
(GBP40m RCF), Bayerische Landesbank (with an average yearly cash
cost of 8.6%), ING and Unicredit (with a combined average yearly
cash cost of 10.3%) for a total amount of GBP163.2m. As a result,
the immediate benefits are expected be more substantial than in the
illustrative example above (which is, as explained above, a
proforma based on best market terms available for a UK solar
portfolio).
The net present value of total cash savings during the first 18
years (compared with debt financing) is higher in net present value
terms than any potential dilution that may be experienced by the
Ordinary Shareholders in any scenario of future NAV of the Company
in 2036.
The refinancing transaction will also allow to simplify the
capital structure of the Company via a reduction in the number of
loans outstanding.
In addition, issue costs associated with this transaction as a
percentage of the amount raised are lower compared to alternative
sources as per the estimate below:
-- c.1.7% for an issue of new Ordinary Shares.
-- c.1.3% for long-term debt.
-- c.1.1% for the issue of the Preference Shares as per the Subscription.
All other details of the Preference Shares remain unchanged.
Enquiries:
NextEnergy Capital Michael Bonte-Friedheim T: +44 (0) 20 3746
Limited / Aldo Beolchini 0700
Cantor Fitzgerald Robert Peel T: +44 (0) 20 7894
Europe 7719
------------------------ --------------------
Fidante Capital John Armstrong-Denby T: +44 (0) 20 7832
0900
------------------------ --------------------
Shore Capital Anita Ghanekar T: +44 (0) 20 7408
4090
------------------------ --------------------
Macquarie Capital Nick Stamp T: +44 (0) 20 3037
(Europe) Limited 2000
------------------------ --------------------
Ipes (Guernsey) Limited Nick Robilliard T: +44 (0) 1481 713
843
------------------------ --------------------
Capitalised terms not defined in this announcement bear the
meanings given to them in the announcement dated 16 October
2018.
Important information:
The information contained in this announcement does not
constitute an offer of securities for sale in any jurisdiction.
Notes to Editors:
The Company is a specialist investment company that invests
primarily in operating solar power plants in the UK. It has the
authority 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.
The Company has raised equity proceeds of GBP592m since its
initial public offering on the main market of the London Stock
Exchange in April 2014. It also has credit facilities outstanding
of c.GBP365m in place (GBP149m from a syndicate including MIDIS,
NAB and CBA; MIDIS: GBP54m; ING GBP32m; UniCredit GBP32m; Santander
GBP40m; and Bayerische Landesbank GBP58m).
The Company 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 www.nextenergysolarfund.com, www.nextenergycapital.com
and www.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
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