Publication of a Prospectus

RNS Number : 5589W

Renewables Infrastructure Grp (The)

27 April 2016

 

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN 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 OR IN ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

This announcement is an advertisement and not a prospectus. Investors should not purchase or subscribe for any transferable securities referred to in this announcement except on the basis of information contained in the Prospectus (as defined herein). This announcement is not an offer to sell, or a solicitation of an offer to acquire, securities in the United States or in any other jurisdiction in which the same would be unlawful. Neither this announcement nor any part of it shall form the basis of or be relied on in connection with or act as an inducement to enter into any contract or commitment whatsoever.

Canaccord Genuity Limited and Liberum Capital Limited (together the "Joint Bookrunners"), are each authorised and regulated by the Financial Conduct Authority, are each acting only for the Company in connection with the matters described in this announcement and are not acting for or advising any other person, or treating any other person as their respective client, in relation thereto and will not be responsible for providing the regulatory protection afforded to their respective clients or advice to any other person in relation to the matters contained herein.

The contents of this announcement, which has been prepared by and is the sole responsibility of the Company, have been approved by InfraRed solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000.

27 April 2016

The Renewables Infrastructure Group Limited ("TRIG" or the "Company")

Publication of Prospectus and Proposed Initial Placing and Offer for Subscription

The board of directors (the "Board") of the Company is pleased to announce the publication of a prospectus (the "Prospectus") in relation to a share issuance programme of up to 300 million new Ordinary Shares and/or C Shares (the "Share Issuance Programme"), including an Initial Placing and Initial Offer for Subscription (the "Initial Issue") as described in the circular to the shareholders dated 14 April 2016 (the "Circular").

Under the Initial Issue, TRIG is proposing to issue up to 50 million new Ordinary Shares at an issue price of 101 pence per Ordinary Share (the "Initial Issue Price"). The New Ordinary Shares issued pursuant to the Initial Issue will rank for the dividend of 1.5625 pence per Ordinary Share expected to be declared in May 2016 and paid in June 2016.

The proceeds from the Initial Issue will be used to repay the amounts drawn under the Acquisition Facility used to acquire assets in the Group's portfolio and to raise further money for investment in accordance with the Company's investment policy.

As announced in the Circular, the Share Issuance Programme, including the Initial Issue, is conditional on the approval of Shareholders at an Extraordinary General Meeting, which has been convened for 3.15p.m. on 4 May 2016 (or, if later, as soon as practicable after the conclusion of the 2016 AGM).

The Prospectus will shortly be made available on the Company's website (www.trig-ltd.com) and on the National Storage Mechanism at www.morningstar.co.uk/uk/NSM. 

Unless otherwise defined, capitalised words and phrases in this announcement shall have the meaning given to them in the Prospectus.

Richard Crawford, Director - Infrastructure at InfraRed Capital Partners, Investment Manager to TRIG, said:

"We are seeing a good flow of renewable projects as developer-owners seek to dispose of assets to long-term investors such as TRIG. This proposed Share Issuance Programme, along with our extensive track-record, will allow us to take advantage of opportunities in both wind and solar PV technologies."

Background to and rationale for the Share Issuance Programme and the Initial Issue

TRIG has typically funded portfolio acquisitions from its £150 million revolving acquisition facility with Royal Bank of Scotland and National Australia Bank which has been repaid from the proceeds of subsequent equity issuance at a premium to the prevailing NAV. As at 25 April 2016, being the latest practicable date prior to the announcement, the Acquisition Facility was £43.7 million drawn and, following the issue of 78 million Ordinary Shares on 3 November 2015, which closed the 2014/2015 Share Issuance Programme and all but exhausted the Company's tap authority taken at the 2015 AGM, the Company is now unable to undertake further equity issuance in meaningful amounts without the publication of a prospectus.

With the backdrop of a continued flow of renewables projects from their developer-owners to new long-term owners, as well as a substantial flow of new developments underway across most of the Company's target markets, TRIG continues to assess a broad active pipeline of onshore wind and solar PV projects for potential investment, as well as potential opportunities in additional technologies such as offshore wind.

After due consideration of the Company's strategy and in light of the pipeline of attractive investment opportunities that the Investment Manager continues to evaluate for the Company, the Board has concluded that it is now appropriate to put in place a new share issuance programme under which it will be able to issue New Shares in a series of subsequent placings. The Company expects to benefit from the flexibility to issue capital quickly and efficiently under the Share Issuance Programme and the Board believes that the Share Issuance Programme will be particularly helpful in strengthening the Company's competitive position, as to flexibility and timing, when the Company seeks to buy larger scale portfolios that become available in the market from time to time.

The Share Issuance Programme

The Company intends to issue up to 300 million New Shares under the Share Issuance Programme pursuant to one or more Tranches (including the Initial Issue). Subject to the Share Issuance Programme becoming unconditional upon the passing of the SIP Disapplication Resolution at the Extraordinary General Meeting, New Shares will be available for issue under the Share Issuance Programme from 4 May 2016 (being the date of the Extraordinary General Meeting) until 26 April 2017 (or any earlier date on which all the New Shares are issued). Each Tranche under the Share Issuance Programme will comprise a placing and may, at the sole discretion of the Directors, comprise an open offer and/or offer for subscription component.

All New Ordinary Shares issued pursuant to the Share Issuance Programme on a non-pre-emptive basis will be issued at a premium to the prevailing Net Asset Value per Ordinary Share which will be at least sufficient to cover the costs and expenses of the relevant Issue.

Initial Issue

Under the Initial Placing and the Initial Offer for Subscription pursuant to the Share Issuance Programme, the Company is proposing to issue up to 50 million New Ordinary Shares. The Initial Issue is comprised of the Initial Placing for up to 40 million New Ordinary Shares and the Initial Offer for Subscription of up to 10 million New Ordinary Shares. The Directors have the discretion to increase the size of the Initial Issue in the event that overall demand for New Ordinary Shares exceeds the target amount and to the extent that TRIG identifies additional investments in respect of which the Directors, in consultation with the Investment Manager and the Operations Manager, believe that the Company has a reasonable prospect of achieving preferred bidder status. The Initial Offer for Subscription and/or the Initial Placing can be increased if the Directors exercise their discretion to increase the overall size of the Initial Issue or in event that the Initial Offer for Subscription is over-subscribed and there remain New Ordinary Shares available under the Initial Placing (and vice versa in the event that the Initial Placing is over-subscribed and there remain New Ordinary Shares available under the Initial Offer for Subscription).

The Initial Issue Price compares to the closing mid-market price of an Ordinary Share of 103.9p as at 25 April 2016 (being the latest practicable date prior to the publication of the Prospectus) and the latest NAV per Ordinary Share as at 31 March 2016 of 97.1p. 

The Initial Issue, which is not underwritten, is conditional upon, inter alia, Initial Admission of the New Ordinary Shares occurring on or before 19 May 2016 (or such later date, not being later than 31 May 2016, as the Company and the Joint Bookrunners may agree). If this, or any of the other conditions to which the Initial Issue is subject are not met, the Initial Issue will not proceed and an announcement to that effect will be made via a Regulatory Information Service.

March 2016 NAV per Ordinary Share

The Company undertakes a valuation bi-annually, as at 30 June and 31 December each year. However the Company has estimated a NAV per Ordinary Share as at 31 March 2016 of 97.1 pence (the "March 2016 NAV") for the purposes of the Share Issuance Programme.  This compares to a NAV of 99.0 pence per Ordinary Share as at 31 December 2015, adjusted for the interim dividend of 3.11 pence per Ordinary Share in respect of the period from 1 July to 31 December 2015 which was paid on 31 March 2016 and reflects earnings of 1.2 pence per Ordinary Share in the first quarter of 2016.

Since the publication of the Company's results for the year ended 31 December 2015, a number of power price forecasters have revised their power price forecasts (which are typically revised quarterly) and these latest revisions showed a reduction in forecasts since those utilised in the valuation of the portfolio as at 31 December 2015. The reduction was on average around 5 per cent. across the forecast period. The March 2016 NAV reflects these reduced forecasts. The reductions in the early years of the projections mainly reflect reduced fossil fuel commodity prices (with gas prices in particular influencing wholesale power pricing) seen globally between November 2015 and February 2016. The reductions in the later years of the projections reflect lower expected future gas wholesale prices and electricity demand due to a lower longer term expected rate of global, and particularly Asian, growth. The March 2016 NAV reflects these reduced forecasts. The further power price forecast adjustment, together with a lower-than-expected level of wind in Q1 2016, have been partially offset by, inter alia, strong demand for income-producing infrastructure assets, including renewable energy infrastructure projects, as the secondary market continues to mature, resulting in a reduction in the prevailing discount rates for operational assets, as well as by a small contribution from a favourable Euro/Sterling movement and measures in the March 2016 UK Budget, including the reduction in UK corporate tax rates to 17 per cent. from 2020. The weighted average portfolio discount rate used to value the March 2016 Portfolio was 8.7 per cent., down from 9.0 per cent. as at 31 December 2015, resulting from a combination of lower discount rates in the market and the addition of the Akuo Energy solar projects to the portfolio in January 2016.  The Akuo Energy solar projects comprise solar assets benefitting from French FiTs.  Such projects are highly valued in the market and command some of the lowest discount rates.

Target Dividends

The Company is targeting an aggregate dividend of 6.25 pence per Ordinary Share for the year ending 31 December 2016, reflecting a 1.0 per cent. inflationary increase above the dividend of 6.19 pence per Ordinary Share paid in respect of the financial year ended 31 December 2015, which it intends to pay in four interim quarterly dividends of 1.5625 pence per Ordinary Share.^[1] The New Ordinary Shares issued pursuant to the Initial Issue will rank for the first quarterly interim dividend which is expected to be declared in May 2016 and paid in June 2016 and for all dividends on Ordinary Shares declared thereafter.

Expected timetable

	2016
Extraordinary General Meeting	3.15 p.m. on 4 May (or, if later, as soon as practicable after the conclusion of the 2016 AGM)
Share Issuance Programme (including the Initial Placing and Initial Offer for Subscription) opens	27 May
Latest time and date for receipt of completed Offer Application Forms and payment in full under the Initial Offer for Subscription	11.00 a.m. on 13 May
Latest time and date for receipt of commitments under the Initial Placing	3.00 p.m. on 16 May
Results of the Initial Issue announced	17 May
Admission and commencement of dealings in New Ordinary Shares issued pursuant to the Initial Issue	8.00 a.m. on 19 May
CREST members' accounts credited in respect of New Ordinary Shares in uncertificated form issued pursuant to the Initial Issue	8.00 a.m. on 19 May
Despatch of definitive share certificates for New Ordinary Shares in certificated form issued pursuant to the Initial Issue	week commencing 23 May
Admission and crediting of CREST accounts in respect of subsequent Tranches	8.00 a.m. on the Business Day on which the relevant New Shares are allotted
	2017
Share Issuance Programme closes	by 26 April

Enquiries

InfraRed Capital Partners Limited                              [phone]

Richard Crawford

Matt Dimond

Tulchan Communications                                           [phone]

Doug Campbell

Latika Shah 

Canaccord Genuity Limited                                         [phone]

Andrew Zychowski

Lucy Lewis

Liberum Capital Limited                                    [phone]

Steve Pearce

Chris Clarke

NOTES TO EDITORS:

TRIG

TRIG is a leading renewable energy infrastructure company delivering long-term, stable dividends from a diversified portfolio of onshore wind and solar photovoltaic projects in the UK and Northern Europe. The Company is seeking to provide investors with long-term, stable dividends, while preserving the capital value of its investment portfolio through re-investment of surplus cash flows after payment of dividends. TRIG is targeting an aggregate dividend of 6.25 pence per Ordinary Share for the year to 31 December 2016.

TRIG is invested in a portfolio of 51 projects in the UK, France and the Republic of Ireland. The Group is seeking further suitable investment opportunities which fit its stated Investment Policy.

Further details can be found on TRIG's website at www.trig-ltd.com 

InfraRed

TRIG's Investment Manager is InfraRed Capital Partners ("InfraRed").

InfraRed is a leading global investment manager focused on infrastructure and real estate. It operates worldwide from offices in London, Hong Kong, New York, Paris, Seoul and Sydney. With around 120 professionals it manages in excess of USD 9 billion of equity capital in multiple private and listed funds, primarily for institutional investors across the globe.

Since its inception over 25 years ago, InfraRed has launched 15 funds, including two companies listed on the London Stock Exchange: HICL Infrastructure Company Limited and The Renewables Infrastructure Group. To date, six of these funds have been realised.

InfraRed has a long and successful proven track record in sourcing, structuring, acquiring, managing and financing infrastructure equity investments. Its history stretches back over 18 years to a time when it advised the UK government on its Public Private Partnership (PPP) programme. Since then, InfraRed has been responsible for over 160 infrastructure equity investments across various sectors including accommodation, education, government, health, renewables and transportation.

Since 2006, InfraRed has been actively participating in the secondary infrastructure markets, expanding its long-standing presence in the development infrastructure market.  It currently manages over 150 infrastructure assets and its renewable energy portfolio has a generation capacity of c. 1.2GW. InfraRed has c. USD6bn of equity invested in infrastructure projects around the globe.

InfraRed implements best-in-class practices to underpin asset management and investment decisions, promotes ethical behaviour and has established community engagement initiatives to support good causes in the wider community. InfraRed is a signatory of the Principles of Responsible Investment.

InfraRed is authorised and regulated by the Financial Conduct Authority.

RES

The Operations Manager of the Group is Renewable Energy Systems Limited ("RES").

RES is one of the world's leading renewable energy companies with extensive experience in developing, financing, constructing and operating renewable energy infrastructure projects globally across a wide range of low carbon technologies including both onshore and offshore wind and solar, as well as enabling technologies such as energy storage and demand-side management.

RES has been at the forefront of wind energy development for over 30 years.  Since incorporation, RES has developed and/or constructed more than 200 wind, solar and energy storage projects around the world with a combined capacity of over 10 GW.

In recognition of extraordinary business success in growing revenues from international markets, RES was awarded its second Queen's Award for Enterprise in 2013, this time for International Trade. Today, projects developed and/or built by RES are contributing to meeting the needs of a rapidly-evolving energy market and, in doing so, are actively contributing to a more sustainable world.

RES's global headcount totals over 1,300 staff based in fourteen countries across five continents.

Important Information

This document is not for release, publication or distribution (directly or indirectly) in or into the United States, Australia, Canada, Japan, the Republic of South Africa or to any "US person" as defined in Regulation S under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or into any other jurisdiction where applicable laws prohibit its release, distribution or publication. It does not constitute an offer of securities for sale anywhere in the world, including in or into the United States, Canada, Australia, Japan or the Republic of South Africa. No recipient may distribute, or make available, this document (directly or indirectly) to any other person. Recipients of this document in jurisdictions outside the UK should inform themselves about and observe any applicable legal requirements in their jurisdictions. In particular, the distribution of this document may in certain jurisdictions be restricted by law.

The Company's Ordinary Shares have not been and will not be registered under the U.S. Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and, subject to certain exceptions, may not be offered or sold within the United States or to, or for the account or benefit of, U.S. Persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction in the United States. The Company has not been and will not be registered as an "investment company" under the U.S. Investment Company Act of 1940, as amended ("the "Act"), and investors will not be entitled to the benefits of that Act. In addition, relevant clearances have not been, and will not be, obtained from the securities commission (or equivalent) of any province of Australia, Canada, Japan or the Republic of South Africa and, accordingly, unless an exemption under any relevant legislation or regulations is applicable, none of the New Ordinary Shares may be offered, sold, renounced, transferred or delivered, directly or indirectly, in Australia, Canada, Japan or the Republic of South Africa.

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[1] The target dividends set out above are not profit forecasts and there can be no assurance that these targets can or will be achieved and they should not be seen as an indication of the Company's expected or actual results or returns.

 

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