TIDMUSF TIDMUSFP
RNS Number : 2208V
US Solar Fund PLC
13 April 2021
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN WHOLE OR IN PART, TO US PERSONS OR INTO OR WITHIN
THE UNITED STATES, AUSTRALIA, CANADA, SOUTH AFRICA OR JAPAN, OR ANY
OTHER JURISDICTION WHERE, OR TO ANY OTHER PERSON TO WHOM, TO DO SO
WOULD BE UNLAWFUL. THE INFORMATION CONTAINED HEREIN DOES NOT
CONSTITUTE OR FORM PART OF ANY OFFER TO SELL OR ISSUE, OR ANY
SOLICITATION OF ANY OFFER TO PURCHASE, SUBSCRIBE FOR OR OTHERWISE
ACQUIRE, ANY INVESTMENTS IN ANY JURISDICTION.
13 April 2021
US SOLAR FUND PLC ("USF", the "Company")
Initial Placing, Offer for Subscription, Intermediaries Offer
and Placing Programme
The Board of US Solar Fund plc today announces a Placing
Programme to be conducted over the next 12 months which includes an
Initial Placing, Offer for Subscription and Intermediaries Offer of
new Ordinary Shares (Initial Issue) which has launched today. A
Prospectus relating to the Initial Issue and the Placing Programme
will be published shortly.
Key Highlights of the Initial Issue
-- The proceeds of the Initial Issue (Initial Proceeds) are
expected to principally be used to fund two transactions which
should benefit the Company by reducing gearing, enhancing dividend
coverage, being NAV accretive and increasing the size and
diversification of the portfolio and the Company:
1. Approximately $82.5 million for the refinancing of the
177MW(DC) Heelstone Portfolio for the Company, reducing the cost
and quantum of gearing; and
2. Approximately $22 million for the acquisition of a further
25% interest in Mount Signal 2, a 200MW(DC) operating solar plant
located in the Imperial Valley of Southern California (MS2),
bringing the Company's total ownership of the asset to 50%.
-- The issue price per new Ordinary Share will be $1.00 (Initial
Issue Price) which represents a discount of 4.3 per cent to the
closing mid market share price of $1.045 as at 12 April 2021 and a
premium of 3.1 per cent to the 31 December 2020 Net Asset Value of
$0.97.
-- New Ordinary Shares issued pursuant to the Initial Issue will
be entitled to receive the interim dividend for the three months
ended 31 March 2021 (First 2021 Interim Dividend). The Company
expects to declare the First 2021 Interim Dividend in June 2021 for
payment in July 2021.
-- Cenkos Securities PLC (Cenkos) and Jefferies International
Limited (Jefferies) are acting as Joint Global Co-Ordinators and
Joint Bookrunners (Joint Bookrunners) for the Initial Issue and the
Placing Programme. Cenkos is acting as Sole Sponsor.
Operational Highlights
-- The Company confirms its 2021 annual cash-covered dividend
target of 5.5 cents per Ordinary Share, within the timing set out
at IPO.
-- The Company has closed six transactions since its IPO,
comprising a diverse portfolio of 42 assets with a total capacity
of 493MW(DC) .
-- These solar projects are spread across four states in the US.
All 42 assets have power purchase agreements (PPAs) for 100% of
generation with nine investment-grade offtakers, and a weighted
average PPA term remaining of 15.4 years, generating reliable
long-term cashflows.
-- 31 December 2020 NAV per share of $0.97. The Company will
announce its Q1 2021 NAV in May 2021. The 31 March 2021
re-valuation is expected to mostly reflect movements in working
capital from electricity sales and operating expenses, and the
Investment Manager does not expect a significant change in the
Company's NAV as a result.
-- USF's portfolio performed 4% above weather-adjusted
expectations during 2020. Based on preliminary operational data,
the portfolio performed in line with weather-adjusted expectations
during Q1 2021; with the Utah and Oregon plants performing
particularly well, and continued improvement in North Carolina.
-- The outlook for the US solar market has strengthened further
and the Biden administration's commitment to clean energy provides
a supportive policy outlook for renewable energy and an
accelerating energy transition in the US. President Biden has
released an outline of the "Build Back Better" plan that includes a
$2 trillion investment towards deploying decarbonisation
technologies within the economy, targeting a carbon-free power
sector by 2035.
-- Strong ESG credentials: USF's portfolio will displace the
equivalent of over 679,000 tonnes of CO(2) emissions from
fossil-fuel generation, equivalent to powering approximately 92,000
US homes, or removing 147,000 US cars from the road, every year.
The Company promotes environmental and social characteristics and
will make available to any investors the disclosure required
pursuant to Article 8(1) of the EU Sustainable Finance Disclosure
Regulation (SFDR). The Company has also qualified for the LSE Green
Economy Mark.
Unless otherwise defined, the terms used in this announcement
shall have the same meaning as set out in the Prospectus.
Gill Nott, Chair of US Solar Fund said:
"US Solar Fund has now delivered on our IPO objectives. As we
step up to our target 5.5% dividend we are today asking investors
for funds to reduce borrowing costs by refinancing existing debt,
and build on our existing stake in California's Mount Signal 2
solar plant.
With a President deeply committed to fiscal policy backing
climate change pledges, the United States is now on a clear path to
a fully carbon-free transition within 14 years. Delivering on bold
and welcome plans in this short time means an urgent need to
develop further utility scale solar.
The US remains one of the world's most attractive investment
markets for solar power production, with well-established policy
frameworks and long-term power purchase agreements. These provide
power price certainty for our investment grade corporate offtakers,
and reliable cashflows for our investors."
The Initial Issue
The Initial Placing and Offer for Subscription is being
conducted in accordance with the terms and conditions to be set out
in the Prospectus due to be published shortly. The Initial Issue
Price will be $1.00. Participants in the Initial Issue may also
elect to subscribe for Ordinary Shares in Sterling at a price per
Ordinary Share equal to the Initial Issue Price at the Relevant
Sterling Exchange Rate. The Relevant Sterling Exchange Rate and the
Sterling equivalent issue price are not known as at the date of
this announcement and will be notified by the Company through an
RIS announcement prior to Initial Admission. The Offer for
Subscription is being made in the UK only. The public generally
(unless they are located or resident outside the UK) may apply for
new Ordinary Shares through the Offer for Subscription. The
Intermediaries Offer will open on 13 April 2021. Retail investors
in the United Kingdom may be eligible to apply for Ordinary Shares
through the Intermediaries Offer by following the application
procedures of the relevant Intermediary. The Intermediaries Offer
is being made to retail investors in the UK only.
In the event that an amount greater than $105 million is raised,
the Company and the Investment Manager may elect to allocate more
capital to the Heelstone Portfolio refinancing or may elect to
invest in one or more additional Solar Power Assets in accordance
with the Investment Policy.
In the event that either: a) an amount less than $105 million is
raised; or b) either the full refinancing, or the completion of
Tranche Two of MS2, is not possible for any reason, the Company and
the Investment Manager may determine to undertake a smaller
refinancing and/or to use the balance of the Net Initial Proceeds,
if any, for acquisitions of Solar Power Assets in accordance with
Investment Policy.
The Initial Issue is not underwritten.
Benefits of the Initial Issue
The Board believes that proceeding with the Initial Issue will
have the following benefits:
-- Provides the Company with the funds to refinance the
Heelstone Portfolio; reducing overall gearing for the Company,
reducing sensitivity to changes in key assumptions including
long-term power prices, and enhancing dividend coverage;
-- Allows the Company to invest further capital in the Company's
identified pipeline opportunities (including Tranche Two of MS2);
further diversifying the Company's portfolio; and
-- Increases the size of the Company; enhancing the efficiency
of fixed running costs and reducing the total expense ratio, making
the Company more attractive to a wider base of investors and
improving market liquidity in the Ordinary Shares.
The Heelstone Refinancing
In January 2020, the Company announced the successful
acquisition of a 177MW(DC) operating portfolio from a subsidiary of
Heelstone Renewable Energy, LLC (Heelstone Portfolio). The existing
capital structure includes approximately $148 million of project
level debt, an amount larger than is typical for this portfolio
with a portion being supported by post-PPA merchant cashflows. The
level of gearing, debt structure, and the interest rate environment
at the time the debt facilities were established, mean that the
cost of this debt is approximately 3.5% higher than the cost of
debt the Company expects it could achieve by refinancing with a
smaller facility. The Company has engaged with project finance
partners and has received proposals to refinance the existing
project level debt to reduce the level of gearing (thereby reducing
risk to equity cashflows), significantly reduce interest costs, and
improve levered cash yields; while maintaining overall returns from
the portfolio.
Illustrative use of proceeds for the refinancing
USD in millions Refinance Portfolio Illustrative Pro Forma Capitalisation
(Status Quo) Refinancing
The Company's
Equity 40.9 82.5 123.4
-------------------- ------------- -------------------------
Existing Debt 147.6 (147.6) -
-------------------- ------------- -------------------------
New Debt - 65.1 65.1
-------------------- ------------- -------------------------
Total 188.5 - 188.5
-------------------- ------------- -------------------------
USD in millions Existing Debt Pro-Forma Delta
Principal 147.6 65.1 (82.5)
-------------- ---------- -------
Interest Rate
(Indicative) 6.25% c. 2.75% (3.5%)
-------------- ---------- -------
Tranche Two of the MS2 Transaction
On 29 March 2021 the Company acquired 25% of MS2 with an option
to acquire a further 25%. Tranche Two comprises an option for the
Company to acquire a further 25% interest for $22 million subject
to a performance-based adjustment mechanism which can adjust the
price upwards or downwards by up to $1 million. The Company 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.
MS2 is a 200MW(DC) operating solar plant located in the Imperial
Valley of Southern California. MS2 has a 20-year PPA with Southern
California Edison, that commenced in June 2020. Under the PPA, 100%
of the electricity generated by MS2 is sold to Southern California
Edison (SCE) at a fixed price, escalating each year by an agreed
percentage. SCE, 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.
Including Tranche Two of MS2, the Company's portfolio would grow
to 543MW(DC) , further increasing the overall size of the portfolio
as well as the percentage of assets in California. California has
been a small share of the total portfolio to date, and this
improves diversification by geography.
Further pipeline
The Investment Manager continues to see strong demand within the
US utility-scale solar market, largely driven by utilities
announcing more solar procurement targets in their integrated
resource plans, backing aggressive state renewable targets. Wood
Mackenzie has forecasted 87GW(DC) of utility-scale solar to come
online between 2021 to 2025. With this dynamic, the Investment
Manager intends to continue to participate in competitive processes
and bilateral or relationship-based processes to build an
attractive portfolio of assets. As of 31 March 2021, the Investment
Manager's pipeline included 3.0GW(DC) of high quality assets with
an aggregate value of approximately $2.9 billion in cash equity and
a weighted-average PPA term remaining of 15 years. Approximately
two-thirds of the pipeline, representing $1.9 billion in cash
equity, represent near-term investment opportunities with
transaction timelines concluding during calendar year 2021.
The Placing Programme
Following completion of the Initial Issue, the Directors may, at
their sole and absolute discretion, elect to carry out one or more
Subsequent Placings under the Placing Programme, should the Board
determine that market conditions are appropriate. In using their
discretion under the Placing Programme, the Directors may take into
account the investment opportunities available to the Company, the
Company's capital structure and the Company's current share price
rating relative to its NAV.
Application for admission
Application will be made to the Financial Conduct Authority and
London Stock Exchange plc for the new Ordinary Shares to be issued
pursuant to the Initial Issue to be admitted to the premium segment
of the Official List and to trading on the Main Market. It is
expected that Initial Admission will become effective, and dealings
commence in respect of the new Ordinary Shares, at 8.00 a.m. on 11
May 2021.
Expected Timetable
Event Date
Initial Issue
---------------------------
Commencement of the Initial Issue 13 April 2021
---------------------------
Latest time and date for applications 1 pm on 5 May 2021
under the Offer for Subscription
and the Intermediaries Offer
---------------------------
Latest time and date for placing 3 pm on 6 May 2021
commitments under the Initial
Placing
---------------------------
Publication of results of the 7 May 2021
Initial Issue
---------------------------
Initial Admission and dealings 8 am on 11 May 2021
in Ordinary Shares commence
---------------------------
CREST Accounts credited with uncertificated as soon as practicable
Ordinary Shares after 8 am on 11 May 2021
---------------------------
LEI: 2138007BIUWE7AHS5Y90
ISIN: GB00BJCWFX49
Each of the times and dates set out above and mentioned
elsewhere in this Announcement may be amended by the Company, in
which event details of the new times and dates will be announced
via a Regulatory Information Service. References to a time of day
are to London time.
For further information, please contact:
US Solar Fund
Whitney Voûte +1 718 230 4329
Cenkos Securities plc
James King
Tunga Chigovanyika
Will Talkington +44 20 7397 8900
Jefferies International Limited
Stuart Klein
Gaudi Le Roux +44 20 7029 8000
KL Communications +44 20 3995 6673
Charles Gorman
Charlotte Stickings
Solid Solutions Associates
(Intermediaries Offer Adviser)
Nigel Morris +44 7850 825701
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. NESM manages over US$1.4bn of invested capital
across US and Australian solar plants.
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.
IMPORTANT NOTICES
This communication is only addressed to, and directed at,
persons in the United Kingdom who are "qualified investors" within
the meaning of Article 2(e) of the UK Prospectus Regulation
(Qualified Investors). For the purposes of this provision, the
expression "UK Prospectus Regulation" means the UK version of the
EU Prospectus Regulation (2017/1129/EU) which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018. In the United
Kingdom, this communication is being distributed only to, and is
directed only at, Qualified Investors (i) who have professional
experience in matters relating to investments who fall within the
definition of "investment professional" in Article 19(5) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order
2005, as amended (Order), or (ii) who are high net worth companies,
unincorporated associations and partnerships and trustees of high
value trusts as described in Article 49(2) of the Order, and (iii)
other persons to whom it may otherwise lawfully be communicated
(all such persons together being referred to as "relevant
persons"). Any investment or investment activity to which this
communication relates is available only to and will only be engaged
in with such persons. This communication must not be acted on or
relied on in the United Kingdom, by persons who are not Qualified
Investors.
This announcement is an advertisement and not a prospectus and
investors should not subscribe for or purchase any shares referred
to in this announcement except on the basis of information in the
prospectus to be published by the Company in due course in
connection with the admission of the shares in the capital of the
Company to the Official List of the Financial Conduct Authority and
to trading on the London Stock Exchange plc's main market for
listed securities (Prospectus). Copies of the Prospectus will,
following publication, be available from the Company's website.
This announcement is not an offer to sell or a solicitation of
any offer to buy the securities of the Company (such securities
being the Securities) in the United States, Australia, Canada,
Japan, South Africa or in any other jurisdiction where such offer
or sale would be unlawful.
The Company has not been and will not be registered under the US
Investment Company Act of 1940 (Investment Company Act) and, as
such, holders of the Securities will not be entitled to the
benefits of the Investment Company Act. No offer, sale, resale,
pledge, delivery, distribution or transfer of the Securities may be
made except under circumstances that will not result in the Company
being required to register as an investment company under the
Investment Company Act. The Securities have not been and will not
be registered under the US Securities Act of 1933 (Securities Act),
or with any securities regulatory authority of any state or other
jurisdiction of the United States, and may not be offered, sold,
resold, pledged, distributed or transferred, directly or
indirectly, into or within the United States or to, or for the
account or benefit of, US persons as defined in Regulation S under
the Securities Act (US Persons) except pursuant to an exemption
from, or in a transaction not subject to, the registration
requirements of the Securities Act and in compliance with any
applicable securities laws of any state or other jurisdiction of
the United States and in a manner which would not require the
Company to register under the Investment Company Act. No public
offering of the Securities is being made in the United States.
Nothing in this announcement constitutes investment advice and
any recommendations that may be contained herein have not been
based upon a consideration of the investment objectives, financial
situation or particular needs of any specific recipient.
The information and opinions contained in this announcement are
provided as at the date of the document and are subject to change
and no representation or warranty, express or implied, is or will
be made in relation to the accuracy or completeness of the
information contained herein and no responsibility, obligation or
liability or duty (whether direct or indirect, in contract, tort or
otherwise) is or will be accepted by the Company, the Investment
Manager, the Joint Bookrunners or any of their affiliates or by any
of their respective officers, employees or agents in relation to
it. No reliance may be placed for any purpose whatsoever on the
information or opinions contained in this announcement or on its
completeness, accuracy or fairness. The document has not been
approved by any competent regulatory or supervisory authority.
Potential investors should be aware that any investment in the
Company is speculative, involves a high degree of risk, and could
result in the loss of all or substantially all of their investment.
Results can be positively or negatively affected by market
conditions beyond the control of the Company or any other person.
The returns set out in the Prospectus and in this announcement are
targets only. There is no guarantee that any returns set out in the
Prospectus and in this announcement can be achieved or can be
continued if achieved, nor that the Company will make any
distributions whatsoever. There may be other additional risks,
uncertainties and factors that could cause the returns generated by
the Company to be materially lower than the returns set out in this
announcement. Past performance cannot be relied on as a guide to
future performance.
The information in this announcement may include forward-looking
statements, which are based on the current expectations and
projections about future events and in certain cases can be
identified by the use of terms such as "may", "will", "should",
"expect", "anticipate", "project", "estimate", "intend",
"continue", "target", "believe" (or the negatives thereon) or other
variations thereon or comparable terminology. These forward-looking
statements, as well as those included in any related materials, are
subject to risks, uncertainties and assumptions about the Company,
including, among other things, the development of its business,
trends in its operating industry, and future capital expenditures
and acquisitions. In light of these risks, uncertainties and
assumptions, the events in the forward-looking statements may not
occur.
Each of the Company, the Investment Manager and the Joint
Bookrunners and their affiliates and their respective officers,
employees and agents expressly disclaim any and all liability which
may be based on this announcement and any errors therein or
omissions therefrom.
No representation or warranty is given to the achievement or
reasonableness of future projections, management targets,
estimates, prospects or returns, if any. Any views contained herein
are based on financial, economic, market and other conditions
prevailing as at the date of this announcement. The information
contained in this announcement will not be updated.
Information to Distributors
Solely for the purposes of the product governance requirements
contained within: the FCA's PROD3 Rules on product governance
within the FCA Handbook (FCA PROD3 Rules), and disclaiming all and
any liability, whether arising in tort, contract or otherwise,
which any "manufacturer" (for the purposes of the FCA PROD3 Rules)
may otherwise have with respect thereto, the Ordinary Shares the
subject of the Offer have been subject to a product approval
process, which has determined that such Ordinary Shares are: (i)
compatible with an end target market of retail investors and
investors who meet the criteria of professional clients and
eligible counterparties, each as defined in FCA Glossary; and (ii)
eligible for distribution through all distribution channels as are
permitted by PROD3 (Target Market Assessment). Notwithstanding the
Target Market Assessment, Distributors should note that: the price
of the Ordinary Shares may decline and investors could lose all or
part of their investment; the Ordinary Shares offer no guaranteed
income and no capital protection; and an investment in the Ordinary
Shares is compatible only with investors who do not need a
guaranteed income or capital protection, who (either alone or in
conjunction with an appropriate financial or other adviser) are
capable of evaluating the merits and risks of such an investment
and who have sufficient resources to be able to bear any losses
that may result therefrom. The Target Market Assessment is without
prejudice to the requirements of any contractual, legal or
regulatory selling restrictions in relation to the Offer.
Furthermore, it is noted that, notwithstanding the Target Market
Assessment, the Joint Bookrunners will only procure investors who
meet the criteria of professional clients and eligible
counterparties.
For the avoidance of doubt, the Target Market Assessment does
not constitute: (a) an assessment of suitability or appropriateness
for the purposes of the FCA PROD3 Rules; or (b) a recommendation to
any investor or group of investors to invest in, or purchase, or
take any other action whatsoever with respect to the Ordinary
Shares.
Each distributor is responsible for undertaking its own target
market assessment in respect of the Ordinary Shares and determining
appropriate distribution channels.
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IOEITMTTMTJBTBB
(END) Dow Jones Newswires
April 13, 2021 02:00 ET (06:00 GMT)
Us Solar (LSE:USF)
Historical Stock Chart
From Apr 2024 to May 2024
Us Solar (LSE:USF)
Historical Stock Chart
From May 2023 to May 2024