Greencoat UK Wind plc (LON:UKW), the leading listed renewable infrastructure fund invested in operating UK wind farms, today announces a new programme of share issuance (the “Share Issuance Programme”) to be conducted over the next 12 months through a number of tranches, with the initial placing (“Initial Placing”) and the initial offer for subscription (“Initial Offer for Subscription”) launching today (the “Initial Tranche”). The prospectus (“Prospectus”) relating to the Share Issuance Programme is expected to be published shortly.
Under the Share Issuance Programme, the Company may issue up to 500 million new ordinary shares over the next 12 months. The net proceeds from the Initial Tranche are expected to be used to pay back amounts owed under the Company’s Facility Agreement (as defined in the Prospectus). The net proceeds from each subsequent tranche under the Share Issuance Programme will be used to (i) pay back amounts outstanding under the Facility Agreement and/or (ii) apply proceeds directly to make further investments.
Tim Ingram, Greencoat Chairman of the Company, said:
“Following our investment in the high quality Stronelairg and Dunmaglass wind farms, and the imminent purchase of the Tom nan Clach wind farm, the share issuance programme launched today will enable the Company to pay down debt and continue to capitalise on the strong pipeline of acquisition opportunities in the UK wind farm secondary market.
Given the size and scale the Company has attained over recent years, UKW is well placed to make value-accretive acquisitions and further enhance returns for our shareholders.”
Background to, and Reasons for, the Share Issuance Programme
Following its successful initial public offering in March 2013, the Company has continued to deliver on its objectives and strategy, achieving the following key milestones:
· Paid or declared dividends of £260.9 million (38.2 pence per share)
· Dividend inflated in line with RPI each year (6.94 pence per share target for 2019)
· Grown NAV to 123.2 pence per ordinary share since listing to 31 March 2019
· Delivered a Total Shareholder Return of 95.5% for the period since listing to 30 April 2019
· Made 28 additional wind generation asset investments increasing the Company’s total net generating capacity from 127MW to 950MW and Gross Asset Value (“GAV”) to £2.3 billion across 34 operating wind farms
· Generated 6.0TWh of power for period since listing to 31 December 2018
Following the completion of the £452 million investment in the Stronelairg and Dunmaglass wind farms announced on 28 March 2019, gearing is £794 million, equivalent to 34 per cent. of GAV.
The Board believes that the Share Issuance Programme will offer significant benefits for all Shareholders and the Company:
· Proceeds will be used to reduce borrowings under the Company’s Facility Agreement
· Enable the Company to pursue further attractive investment opportunities
· Expanding the Company’s equity capital will further increase the trading liquidity of UKW’s shares
· Reduce the Company’s ongoing expense ratio due to the economy of scale
· As both the Initial Tranche and any subsequent issues will be priced above the prevailing NAV per share, the Share Issuance Programme will be NAV accretive
The Initial Tranche
· Under the Share Issuance Programme, subject to approval by Shareholders, UKW will issue new ordinary shares by way of the Initial Placing and Initial Offer for Subscription at an issue price of 133 per share
o The issue price of 133p represents a discount of 5.2% to the closing share price on 1 May 2019 and a premium of 9.5% to the last reported NAV of 121.47p (as at 31 March 2019) (both adjusted for the payment of the 1.735p dividend on 24 May 2019)
o The Initial Tranche, and all subsequent tranches, are expected to be accretive to the prevailing net asset value per share of the Company, after costs.
o The Initial Tranche is expected to close later in May; the full timetable will be published with the prospectus shortly
· The net issue proceeds from the Initial Tranche are expected to be used to pay back amounts owed under the Company’s Facility Agreement.
· The timetable for the Initial Tranche is expected to be published with the prospectus shortly.
Share Issuance Programme
· In conjunction with the Initial Tranche, the Board intends to implement a Share Issuance Programme
· The issue of shares under the Share Issuance Programme is not being underwritten
· Under the Share Issuance Programme, subject to approval by shareholders, UKW has the option to issue up to 500 million new ordinary shares
· The Share Issuance Programme is being implemented to raise additional capital in the 12 months following publication of the prospectus in order to take advantage of the strong pipeline of opportunities available to the Company
Conditions
The issuance of each tranche of shares pursuant to the Share Issuance Programme is conditional upon, inter alia:
· admission occurring in respect of the relevant tranche;
· the placing agreement in respect of the Initial Tranche, or the relevant placing agreement in connection with any subsequent placing, becoming otherwise unconditional in respect of the relevant tranche, and not being terminated in accordance with its terms or such tranche not having been suspended in accordance with the placing agreement in question, in each case before admission of the relevant tranche becomes effective;
· if a supplementary prospectus is required to be published in accordance with FSMA, such supplementary prospectus being approved by the FCA and published by the Company in accordance with the Prospectus Rules; and
· the passing of the required shareholder resolutions at the general meeting
If any of these conditions is not met, the relevant tranche of shares pursuant to the Share Issuance programme will not proceed.
Notice of General Meeting
· The Company will publish a circular to Shareholders and notice of general meeting in connection with the proposals for the issue of new ordinary shares pursuant to the Share Issuance Programme shortly.
A further announcement will be made upon publication of the prospectus.
RBC Europe Limited (trading as RBC Capital Markets) is acting as sponsor and bookrunner to the Company and Kepler Partners LLP is acting as placing agent with regards to the Initial Tranche and the Share Issuance Programme.
