Proposed Placing to Fund Acquisition Pipeline

RNS Number : 5040V

SDCL Energy Efficiency Income Tst

09 April 2019

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, TO US PERSONS OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR THE REPUBLIC OF SOUTH AFRICA OR INTO ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OR BREACH OF ANY APPLICABLE LAW. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS. THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM PART OF, AND SHOULD NOT BE CONSTRUED AS, ANY OFFER FOR SALE OR SUBSCRIPTION OF, OR SOLICITATION OF ANY OFFER TO BUY OR SUBSCRIBE FOR, ANY SHARES IN THE COMPANY OR SECURITIES IN ANY OTHER ENTITY, IN ANY JURISDICTION, INCLUDING THE UNITED STATES, NOR SHALL IT, OR ANY PART OF IT, OR THE FACT OF ITS DISTRIBUTION, FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY CONTRACT OR INVESTMENT DECISION WHATSOEVER, IN ANY JURISDICTION. THIS ANNOUNCEMENT DOES NOT CONSTITUTE A RECOMMENDATION REGARDING ANY SECURITIES. ANY INVESTMENT DECISION MUST BE MADE EXCLUSIVELY ON THE BASIS OF THE PROSPECTUS PUBLISHED BY THE COMPANY ON 22 NOVEMBER 2018 IN CONNECTION, INTER ALIA, WITH ITS SHARE ISSUANCE PROGRAMME (THE "PROSPECTUS").

THIS ANNOUNCEMENT HAS BEEN DETERMINED TO CONTAIN INSIDE INFORMATION. 

9 April 2019

SDCL Energy Efficiency Income Trust plc  

("SEEIT" or the "Company") 

Proposed Placing to Fund Acquisition Pipeline
 

On 22 November 2018, SEEIT published a prospectus in connection with a Share Issuance Programme for up to 500 million Shares (the "Prospectus") and on 11 December 2018 the Company announced its Admission to the London Stock Exchange in respect of 100 million Ordinary Shares.

Today the Board of Directors (the "Board") announces a proposed non pre-emptive placing of new Ordinary Shares in the capital of the Company (the "Placing Shares") under the Share Issuance Programme to institutional investors (the "Placing"), at a price of 101.0 pence per Placing Share (the "Placing Price").

The Placing Price represents a discount of approximately 1.7 per cent. to the closing price of 102.8 pence per ordinary share at the close of business on 8 April 2019.

The Placing is being launched immediately following this announcement and will close at 3:00 p.m. GMT on 16 April 2019. Jefferies International Limited ("Jefferies") is acting as sole bookrunner in connection with the Placing.

Highlights of the Placing

·   The Company intends to use the net proceeds of the Placing together with debt financing to assist in funding the acquisition of certain pipeline project assets that were identified at the time of the IPO.  

·      These assets:

o  meet the Company's investment criteria and are expected to generate attractive returns; and

o  provide significant geographic and counterparty diversification to the portfolio.

·   The Company is in advanced negotiations with the vendor of a diversified operational portfolio of cogeneration assets in Southern Europe.

·    The Company has a strong pipeline of other investment opportunities, including rooftop solar projects in the UK and Portugal.

·     The Placing Shares, when issued, will rank pari passu with the existing ordinary shares including the right to receive all dividends and other distributions declared, made or paid after the date of issue.

·     An initial interim dividend in respect of the period from admission on 11 December 2018 to 31 March 2019 of not less than 1.0 pence per share is expected to be declared in early May 2019, after the Placing has completed.

Expected Timetable

Placing opens		9 April 2019
Latest time and date for receipt of Placing commitments		3:00 p.m. GMT on 16 April 2019
Announcement of the results of the Placing		16 April 2019
Admission of the ordinary shares to the Official List and to trading on the London Stock Exchange's main market for listed securities		As soon as practicable after 8.00 a.m. GMT on 18 April 2019
Crediting of CREST stock accounts		18 April 2019

The Company, in consultation with Jefferies, reserves the right to close the Placing early. In such event, the Company will notify investors by the publication of a notice through a Regulatory Information Service.

Background to the Placing

Following SEEIT's IPO, the Company acquired a seed portfolio comprising nine Energy Efficiency Projects for a total cash consideration of £57 million. In addition, SEEIT entered into three contracted investment opportunities with identified Counterparties totalling c.£30 million, which have not yet been drawn down.

On 7 March 2019, SEEIT announced its first acquisition in the United States comprising a 71% interest in a high-quality Combined Heat and Power ("CHP") portfolio of eight operating projects for a total cash consideration of $5 million.

Noting the current acquisition pipeline, the Company intends to raise additional equity by way of the Placing under its existing Share Issuance Programme.

Debt financing

The Company intends in part to finance the acquisition of the pipeline assets through entering into new borrowing facilities in the near term.

Dividend policy and initial interim dividend

In accordance with its dividend policy, the Company is targeting an annual dividend yield of 5.0 per cent. by reference to the Initial Issue Price for the year ending 31 March 2020, rising to 5.5 per cent. in the year ending 31 March 2021, and a growing yield thereafter.

An initial interim dividend in respect of the period from admission on 11 December 2018 to 31 March 2019 of not less than 1.0 pence per share is expected to be declared in early May 2019, after the Placing has completed.

Dividends are expected to be fully covered by adjusted earnings of the Company.

Details of the Placing

The Company intends to issue a fixed number of Placing Shares which will comprise the second tranche of the Company's Share Issuance Programme of up to 500 million new Ordinary Shares, following an issue of 100 million Ordinary Shares at IPO. The Placing is conditional inter alia, on the Placing Shares being admitted to listing on the premium listing segment of the Official List of the UK Financial Conduct Authority (the "FCA"), and to trading on the main market for listed securities of the London Stock Exchange plc (the "London Stock Exchange") (together, "Admission").

The Placing is subject to the terms and conditions set out in the Prospectus dated 22 November 2018.

Jefferies will today commence a bookbuild process in respect of the Placing at the Placing Price. The Placing will be non pre-emptive pursuant to the terms set out in the Prospectus and the book will open with immediate effect following this Announcement and is expected to close no later than 3:00 p.m. GMT on 16 April 2019 but may be closed earlier or later at the absolute discretion of Jefferies and the Company. Details of the number of Placing Shares to be issued pursuant to the Placing will be determined by the Company (following consultation with Jefferies) and will be announced as soon as practicable after the close of the Placing. The Placing Shares will be allocated at the discretion of Jefferies in consultation with the Company.

Application will be made for Admission of the Placing Shares. Subject to Admission becoming effective, it is expected that settlement of subscriptions by placees in respect of the Placing Shares and trading in the Placing Shares will commence at 8.00 a.m. on 18 April 2019, or such later time and/or date as may be announced by the Company after the close of the Placing.

By choosing to participate in the Placing and by making an oral and legally binding offer to acquire Placing Shares, investors will be deemed to have read and understood each of this Announcement and the Prospectus in its entirety and to be making such offer on the terms and subject to the conditions in such Announcement, and to be providing the representations, warranties and acknowledgements contained in the Prospectus.

Your attention is drawn to the detailed terms and conditions of the Share Issuance Programme set out in the Prospectus.

Terms used in this announcement shall, unless the context otherwise requires, bear the meanings given to them in the Prospectus which can be found on SEEIT's website at www.sdcleeit.com.

Dealing codes

Ticker	SEIT
ISIN for the ordinary shares	GB00BGHVZM47
SEDOL for the ordinary shares	BGHVZM4

For Further Information

Sustainable Development Capital LLP Jonathan Maxwell Miles Alexander Keith Driver	T: [phone]
Jefferies International Limited Gary Gould David Watkins Tom Hovanessian	T: [phone]
TB Cardew Ed Orlebar Emma Crawshaw	T: [phone] M: [phone] E: [e-mail]

About SEEIT

SDCL Energy Efficiency Income Trust plc is the first listed company of its kind to invest exclusively in the energy efficiency sector. Having raised £100 million gross proceeds in its London Stock Exchange IPO in December 2018, the Company acquired its seed portfolio later that month for a total cash commitment of £87 million. Examples of the projects in the seed portfolio include Combined Cooling/Heating and Power Plants at a Citi data centre and St Bartholomew's Hospital in London, as well as LED lighting projects for hundreds of Santander properties and over 100 NCP car parks in the UK. In addition, SEEIT announced on 7 March its first acquisition in the United States comprising a 71% interest in a high-quality portfolio of eight operating CHP projects for a total cash consideration of $5 million.

SEEIT aims to deliver shareholders value through its investment in a diversified portfolio of Energy Efficiency projects which are driven by the opportunity to deliver lower cost, cleaner and more reliable energy solutions to end users of energy.

SEEIT aims to give investors an attractive total return of 7-8 per cent. per annum (net of fees and expenses and by reference to the initial issue price of £1.00 per Ordinary Share), with a stable dividend income, capital preservation and the opportunity for capital growth.

Investment Manager

SEEIT's investment manager is Sustainable Development Capital LLP ("SDCL"), an investment firm established in 2007, with a proven track record of investment in energy efficiency and decentralised generation projects in the UK, Continental Europe, North America and Asia.

SDCL is headquartered in London and the group also operates worldwide from offices in New York, Dublin and Singapore. SDCL is authorised and regulated in the UK by the Financial Conduct Authority.

DISCLAIMERS

This announcement is not an offer to sell or a solicitation of any offer to buy the Shares in the Company in the United States, Australia, Canada, New Zealand or the Republic of South Africa, Japan, or in any other jurisdiction where such offer or sale would be unlawful.

This communication is not for publication or distribution, directly or indirectly, in or into the United States of America. This communication is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.

The Company has not been and will not be registered under the US Investment Company Act of 1940 (the "Investment Company Act") and, as such, holders of the Shares will not be entitled to the benefits of the Investment Company Act.  No offer, sale, resale, pledge, delivery, distribution or transfer of the Shares 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. 

This communication is only addressed to, and directed at, persons in member states of the European Economic Area (other than the United Kingdom) who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive ("Qualified Investors").  For the purposes of this provision, the expression "Prospectus Directive" means Directive 2003/71/EC and includes any relevant implementing measure in each member state of the European Economic Area which has implemented the Prospectus Directive. In addition, 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 (the "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 any member state of the European Economic Area other than the United Kingdom, by persons who are not Qualified Investors.

The merits or suitability of any securities must be independently determined by the recipient on the basis of its own investigation and evaluation of the proposed investment trust. Any such determination should involve, among other things, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of the securities.

This announcement may not be used in making any investment decision.  This announcement does not contain sufficient information to support an investment decision and investors should ensure that they obtain all available relevant information before making any investment.  This announcement does not constitute and may not be construed as an offer to sell, or an invitation to purchase or otherwise acquire, investments of any description, nor as a recommendation regarding the possible offering or the provision of investment advice by any party. No information in this announcement should be construed as providing financial, investment or other professional advice and each prospective investor should consult its own legal, business, tax and other advisers in evaluating the investment opportunity. No reliance may be placed for any purposes whatsoever on this announcement (including, without limitation, any illustrative modelling information contained herein), or its completeness.

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 SEEIT, SDCL, Jefferies 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.

SEEIT has a limited trading history. Potential investors should be aware that any investment in SEEIT 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 SEEIT or any other person. The returns set out in this document are targets only. There is no guarantee that any returns set out in this document can be achieved or can be continued if achieved, nor that SEEIT will make any distributions whatsoever. There may be other additional risks, uncertainties and factors that could cause the returns generated by SEEIT to be materially lower than the returns set out in this document. Potential investors should read the section entitled ''Risk Factors'' of the Prospectus when considering an investment in SEEIT.

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 SEEIT, 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 SEEIT, SDCL, Jefferies 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.

This announcement does not constitute or form part of, and should not be construed as, any offer or invitation or inducement for sale, transfer or subscription of, or any solicitation of any offer or invitation to buy or subscribe for or to underwrite, any share in SEEIT or to engage in investment activity (as defined by the Financial Services and Markets Act 2000) in any jurisdiction nor shall it, or any part of it, or the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision whatsoever, in any jurisdiction.  This announcement does not constitute a recommendation regarding any securities.

Neither the United States Securities and Exchange Commission nor any state securities commission has approved or disapproved of SEEIT's Shares or passed upon or endorsed the merits of the offering of SEEIT's Shares or the adequacy or accuracy of this announcement.

Prospective investors should take note that SEEIT's Shares may not be acquired by: (i) investors using assets of: (A) an "employee benefit plan" as defined in Section 3(3) of US Employee Retirement Income Security Act of 1974, as amended ("ERISA") that is subject to Title I of ERISA; (B) a "plan" as defined in Section 4975 of the US Internal Revenue Code of 1986, as amended (the "US Tax Code"), including an individual retirement account or other arrangement that is subject to Section 4975 of the US Tax Code; or (C) an entity which is deemed to hold the assets of any of the foregoing types of plans, accounts or arrangements that is subject to Title I of ERISA or Section 4975 of the US Tax Code; or (ii) a governmental, church, non-US or other employee benefit plan that is subject to any federal, state, local or non-US law that is substantially similar to the provisions of Title I of ERISA or Section 4975 of the US Tax Code.

Jefferies is authorised and regulated in the United Kingdom by the Financial Conduct Authority. Jefferies is acting for SEEIT and no one else in connection with the Placing, and will not be responsible to anyone other than SEEIT for providing the protections afforded to clients of Jefferies or for affording advice in relation to any transaction or arrangement referred to in this announcement. This announcement does not constitute any form of financial opinion or recommendation on the part of Jefferies or any of its affiliates and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities.

In accordance with the Packaged Retail and Insurance-based Investment Products Regulation (EU) No 1286/2014, the Key Information Document relating to SEEIT is available to investors at www.sdcleeit.com.

 

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