Greencoat UK Wind plc, a listed renewable infrastructure fund, solely and fully invested in operating UK wind farms, recently announced the proposed issue of up to 300 million new shares through a programme of share issuance. The proceeds of the programme, which will be conducted over the next 12 months through a number of tranches, will be used to pay down the company's Revolving Facility Agreement enabling the company to pursue further attractive investment opportunities.
Commenting on today's announcement, Tim Ingram, Chairman of UKW, said:
"We believe that the future opportunities for Greencoat UK Wind are very exciting. There is a significant asset pool with a healthy number of motivated sellers and we are very well placed to take advantage of this. This programme of capital raises announced today will enable the Company both to pay down debt, and to take advantage of value-accretive growth opportunities whilst maintaining its very selective acquisition approach."
Background to, and Reasons for, the Share Issuance Programme
Following its successful and substantially oversubscribed initial public offering in March 2013, the company has continued to deliver on its objectives and strategy, achieving the following key milestones:
- Since listing (£260 million initially raised), UKW has paid or declared 9 dividends equivalent to 18.5p; a total of £76.6 million
- Grown Net Asset Value ("NAV") per ordinary share by c. 4% for the period since listing to 31 March 2016
- Made 12 additional wind generation asset investments increasing the company's total net generating capacity from 127MW to 400MW and Gross Asset Value to £850 million across 18 wind farms
- Operational performance across the portfolio has been in line with management expectations
- Following the acquisition of Stroupster Wind Farm in December 2015 and a 28.2% interest in Clyde Wind Farm in March 2016 for an aggregate consideration of c. £280 million, UKW has outstanding borrowings of £225 million under its Revolving Facility Agreement and £100 million under its Long Term Facility Agreement, equivalent to 38% of Gross Asset Value (total gearing limited to 40%).
The Board believes that the Share Issuance Programme will offer significant benefits for all Shareholders and the Company:
- Proceeds will enable the Company to access a strong pipeline of potential investment opportunities
- Proceeds will be used to reduce borrowings under the Company's Revolving Facility Agreement in line with the Company's long term gearing target of 20-30%
- Expanded equity capital will improve liquidity in the trading of UKW's shares
- Given the fixed costs of the Company and increased NAV, issues of new shares under the programme should reduce UKW's ongoing charge ratio
- As the Initial Issue (as defined below) is at a price above the ex-dividend NAV per share, the Initial Issue will be NAV per share enhancing.