US Solar Fund PLC SIXTH BINDING ACQUISITION AGREEMENT (2052K)
December 31 2020 - 2:00AM
UK Regulatory
TIDMUSF TIDMUSFP
RNS Number : 2052K
US Solar Fund PLC
31 December 2020
31 December 2020
US SOLAR FUND PLC (USF, the Company)
SIXTH BINDING ACQUISITION AGREEMENT
USF to acquire up to 50% of 200MW(DC) Mount Signal 2
US Solar Fund Plc ( LON:USF (USD) / USFP (GBP) ) is pleased to
announce it has executed binding agreements to acquire up to a 50%
interest in a 200MW(DC) operating solar plant located in the
Imperial Valley of Southern California, Mount Signal 2 (MS2, the
Project), for a total price of between $44 million and $46 million
(the Transaction).
The Transaction is structured in two tranches. Tranche One
comprises an immediate acquisition of an initial 25% interest for a
fixed price of $23m and is expected to be completed during the
first quarter of 2021, subject to customary third-party consents.
Tranche Two consists of an option for USF to acquire a further 25%
interest for $22m subject to a performance-based adjustment
mechanism which can adjust the price upwards or downwards by up to
$1m. USF may exercise the Tranche Two option for up to 12 months
from Tranche One completion, with Tranche Two completion subject to
the same customary third party consents as Tranche One.
On completion of Tranche One of the Transaction, USF's total
portfolio will be 493 MW(DC) of fully operational assets in five
states of the US, with a weighted average investment-grade PPA term
of 15.6 years [i] .
USF will acquire the investment in MS2 from New Energy Solar
Fund (NEW), an Australia listed (ASX) solar fund, also managed by
USF's Investment Manager, New Energy Solar Manager. NEW acquired
MS2 at construction-ready stage in 2018 and announced in late 2019
that it was contemplating a sale of up to a 50% interest in the
Project.
MS2 was built during 2018 and 2019 by Swinerton Renewable
Energy, a leading US constructor. The Project uses First Solar
Series 6 modules, with operations and maintenance services provided
by First Solar Energy Services under a long-term contract. MS2 has
a 20-year PPA with Southern California Edison (SCE), that commenced
in June 2020. Under the PPA, 100% of the electricity generated by
MS2 is sold to SCE at an annually escalating price. SCE (S&P:
BBB), a subsidiary of Edison International, serves a population of
more than 15 million people and is the primary electricity provider
for central, southern and coastal California.
Co-investments in solar power assets like MS2 were contemplated
at the time of USF's listing and initial public offering. To ensure
arm's length terms, the USF and NEW boards each adopted a
Transaction-specific protocol, with each board retaining
independent advisors. USF was advised by lawyers Herbert Smith
Freehills in the UK, and Troutman Pepper in the US. USF also
engaged its US valuer to provide an independent, external benchmark
for the Transaction price.
USF will fund Tranche One with available cash. As Tranche Two is
an option in USF's favour, the funding source for Tranche Two will
be announced if and when USF decides to exercise the option.
Commenting on the transaction, Gill Nott, Chair of the Company
said:
"The Board is pleased to add an initial 25% of this large
utility-scale asset to USF's portfolio. MS2's long term,
investment-grade, escalating-price PPA brings USF's weighted
average remaining PPA term to almost 16 years and provides further
diversification in terms of geography, project and PPA offtaker to
the portfolio. As a result of the Transaction, 100% of USF's IPO
proceeds have now been invested or committed to operational
projects and we look forward to continuing to offer investors the
opportunity to participate in the attractive US solar market ".
For further information, please contact:
US Solar Fund
Whitney V oûte +1 718 230 4329
Cenkos Securities plc
James King
Will Talkington +44 20 7397 8900
Jefferies International Limited
Stuart Klein
Gaudi le Roux
Neil Winward +44 20 7029 8000
KL Communications +44 20 3995 6673
Charles Gorman
Charlotte Stickings
About US Solar Fund plc
US Solar Fund plc listed on the premium segment of the London
Stock Exchange in April 2019, following its successful $200m IPO.
The Company's investment objective is to provide investors with
attractive and sustainable dividends with an element of capital
growth by investing in a diversified portfolio of solar power
assets in North America and other OECD countries in the
Americas.
The Company acquires or constructs, owns and operates solar
power assets that are expected to have an asset life of at least 30
years and generate stable and uncorrelated cashflows by selling
electricity to creditworthy offtakers under long-term power
purchase agreements (or PPAs).
Further information on the Company can be found on its website
at http://www.ussolarfund.co.uk .
About the Investment Manager
USF is managed by New Energy Solar Manager (NESM). NESM also
manages New Energy Solar, an Australian Securities Exchange
(ASX)-listed fund which has committed over $900m to US and
Australian solar plants since late 2015.
NESM is owned by E&P Funds, the funds management division of
E&P Financial Group, an ASX listed company (ASX: EP1) with over
A$20 billion of funds under advice.
[i] Based on initial 25% acquisition. If the option were to be
exercised for the second 25%, the weighted average PPA term
remaining would be 16 years.
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