RNS Number : 7562Y

Cordiant Digital Infrastructure Ltd

17 May 2021


This Announcement has been determined to contain inside information for the purposes of the UK version of the market abuse regulation (EU) No.596/2014.


Cordiant Digital Infrastructure Limited

Placing of C Shares

17 May 2021

The Board of Cordiant Digital Infrastructure Limited (the "Company") is pleased to announce the launch of a placing of C Shares to enable the Company to complete acquisitions from its pipeline of potential digital infrastructure investments, specifically certain attractive transactions where due diligence is well advanced.

Key Highlights

-- Advanced pipeline. The Company's pipeline of further high quality, well-advanced and complementary transaction opportunities (across the U.S., Canada, Scandinavia and other European markets) has grown considerably in quantity since the IPO. Cordiant Capital, Inc. (the "Investment Manager") is currently at an advanced stage of negotiations in relation to particularly attractive, time-sensitive potential transactions with a value of approximately GBP800 million. In aggregate, the Company has an actionable pipeline in excess of GBP1.2 billion.

-- Issue of C Shares. In light of this significant and actionable pipeline of potential transactions, the Company is targeting a placing under the Company's existing Placing Programme to raise a target amount of GBP250 million through the issue of C Shares (the "C Share Placing") at a placing price of 100p per C Share (the "Placing Price"). Steven Marshall, Chairman of Digital Infrastructure at the Investment Manager, intends to subscribe for a minimum of one million C Shares pursuant to the C Share Placing.

-- Revolving Credit Facility. In addition to the C Share Placing, the Company is in discussions with potential debt providers in relation to a revolving credit facility for the Company to be used for the purposes of funding future acquisitions.

Steven Marshall, Chairman Digital Infrastructure, Cordiant Capital Inc. said:

"Digital infrastructure assets are uniquely placed to participate in the acceleration of the digitisation of the economy and society, including the transition to net zero. The Company has already acquired one high quality platform, has signed a binding letter on another and has an advanced pipeline of highly attractive opportunities, with a blend of cash generative and growth assets. The opportunity to add any one of these assets to the existing portfolio is compelling and the window of investment is immediate".

Shonaid Jemmett-Page, Chairman of the Company , said:

"The swift deployment of the IPO proceeds and the depth of the advanced pipeline that our investment manager has originated affords us the opportunity to raise additional equity. The Board believes that, by seeking to expand the portfolio into attractive investments early in the Company's life, the Company will be well placed to deliver compound growth in future years."

Background to the Issue

On 4 May 2021, the Company announced that it had completed the acquisition of České Radiokomunikace a.s. (CRA) and entered into a legally binding letter of intent (subject to confirmatory technical due diligence and final transaction documentation) to acquire a Norwegian fibre network and certain land sites for data centre development for a combined total consideration of GBP451 million. Together, these acquisitions comprise GBP318 million of equity investment and the assumption of an amount equal to GBP133 million of non-recourse net debt. These acquisitions, generating estimated EBTIDA of circa GBP40.5 million over the 12 months ended 31 December 2020(1) , have enabled the Company to accelerate its dividend guidance for the current financial year to 3 pence per share, with an intention to further accelerate the dividend guidance over paying a dividend of 4 pence per share in future years.

The Company has a pipeline of investment opportunities at an advanced stage of negotiations of approximately GBP800 million that significantly exceeds the Company's remaining uninvested Ordinary Share capital from its IPO. In aggregate, the pipeline of actionable opportunities exceeds GBP1.2 billion.

The attractive, near-term pipeline includes opportunities to invest in a substantial European data centre platform, a multi-asset tower and fibre platform in Europe, and a North American edge data centre platform (the "Advanced Pipeline").

The Board and Investment Manager believe that these are compelling opportunities and that there is currently a window of opportunity to assemble an attractive portfolio of digital infrastructure platforms in Europe and North America. As a result, and in order to seek to acquire assets in the Advanced Pipeline, the Company is launching the C Share Placing.

The Advanced Pipeline

The Investment Manager is in exclusive, bilateral negotiations on the basis of an agreed price, and has substantially completed due diligence on a European multi-asset tower and IoT platform. The Investment Manager is encouraged by the due diligence conducted to date and, if concluded satisfactorily, would expect to be able to announce a deal in June (subject to government approvals on EU foreign direct investment requirements).

The Investment Manager has commenced initial due diligence on an opportunity to acquire a European data centre platform with a high quality management team and growth prospects. This attractive asset has the potential to anchor the Company's European data centre strategy and, if successful, an acquisition could complete in Q3 2021.

The North American data centre opportunity is a bilateral negotiation and represents a unique opportunity for the Company to make a majority investment in a data centre platform alongside an entrepreneurial founder seeking a partner to significantly expand the business. If successful, an acquisition could complete in Q3 2021.

The C Share Placing

The Company is seeking to raise a target amount of GBP250 million (before expenses) through the placing of 250 million C Shares at an issue price of 100p per C Share under its existing Placing Programme (the Placing Programme is covered by the Company's existing prospectus dated 29 January 2021 (the "Prospectus")). The Board has discretion to increase the size of the C Share Placing if considered appropriate to satisfy investor demand up to the maximum of 500 million C Shares available under the Placing Programme.

Steven Marshall, Chairman of Digital Infrastructure at the Investment Manager, intends to subscribe for a minimum of one million C Shares pursuant to the C Share Placing.

Use of proceeds

The Company will first invest the remaining uninvested IPO net proceeds, less required working capital, of circa GBP36 million. However, this will be insufficient to finance in full two of the Advanced Pipeline deals. The Company therefore expects the net proceeds of the C Share Placing to be deployed quickly, subject to commercial agreement, due diligence and regulatory approvals (if required), into deals from the Advanced Pipeline in accordance with the Company's Investment Policy, initially alongside the Ordinary Share portfolio and then exclusively within the C Share portfolio.

Under the terms of the Company's articles of incorporation, the C Shares will not convert into Ordinary Shares until at least 80 per cent. of the net proceeds of the C Share issue have been invested in accordance with the Company's investment policy (or, if earlier, 12 months after the date of the issue of the C Shares). The assets representing the net proceeds of the C Share issue will be accounted for and managed as a distinct pool of assets until their conversion date. By accounting for the net proceeds of the C Share issue separately, Ordinary Shareholders will not participate in a portfolio containing a substantial amount of uninvested cash before the conversion date.

The basis on which the C Shares will convert into Ordinary Shares is such that the number of Ordinary Shares to which holders of C Shares will become entitled will re ect the relative net asset values per share of the assets attributable to the C Shares and the Ordinary Shares. As a result, the Net Asset Value per Ordinary Share can be expected to be unchanged by the issue and conversion of any C Shares, and the Net Asset Value of the Ordinary Shares will not be diluted by the expenses of the C Share issue, which will be borne by the C Share pool. The value of the existing assets in the current portfolio attributable to the Ordinary Shares will include all accrued income and will also take into account all relevant factors which may affect the valuation of the existing assets as at that date.

On conversion, the new Ordinary Shares issued through the conversion of the C Shares, will rank pari passu with the existing Ordinary Shares in issue on the date of conversion.

C Share dividend

To the extent that the C Shares have not been converted into new Ordinary Shares prior to the ex-dividend date for any dividend declared on the Ordinary Shares, the Company intends to declare a dividend of an equal amount from the C Share pool to the holders of C Shares.

Annual management fee on C Shares

The Investment Manager has agreed that no annual management fee shall accrue or be charged on the undeployed cash net proceeds of the C Share Placing until such time as 75 per cent. or more of such net proceeds have been Deployed. For these purposes, "Deployed" means invested in, or committed to, the acquisition or development of Digital Infrastructure Assets.

Further details

Investec Bank plc ("Investec") is acting as financial adviser, global co-ordinator and sole bookrunner to the Company in connection with the C Share Placing. Investec will today commence a bookbuild process in respect of the C Share Placing at the Placing Price. The C Share Placing will be non-pre-emptive pursuant to the terms set out in the Prospectus and is expected to close no later than 12 noon BST on Tuesday, 8 June 2021 but may be closed earlier or later at the absolute discretion of Investec and the Company.

The C Share Placing is conditional, inter alia, on the C Shares being admitted to trading on the Specialist Fund Segment of the Main Market for listed securities of the London Stock Exchange ("Admission"). Subject to Admission becoming effective, it is expected that settlement of subscriptions by placees in respect of the C Shares and trading in the C Shares will commence at 8.00 a.m. BST on Thursday, 10 June 2021, or such later time and/or date as may be announced by the Company after the close of the C Share Placing.

The target number of C Shares to be issued pursuant to the C Share Placing is 250 million but the Board may increase the number of C Shares to be issued under the C Share Placing if it, in consultation with Investec and the Investment Manager, believes there is sufficient investor demand for those shares and suitable assets available for investment in which to deploy the net proceeds of the C Share Placing.

The C Share Placing is not underwritten. The C Share Placing may be scaled back by the Company for any reason, including where it is necessary to scale back allocations to ensure the net proceeds of the C Share Placing align with the Company's post fundraise acquisition targets. Details of the number of C Shares to be issued pursuant to the C Share Placing will be determined by the Board (following consultation with Investec and the Investment Manager) and will be announced as soon as practicable after the close of the C Share Placing.

The Placing Price is 100 pence per C Share.

By choosing to participate in the C Share Placing and by making an oral and legally binding offer to subscribe for C Shares, investors will be deemed to have read and understood this Announcement and the Prospectus in their entirety and to be making such offer on the terms and subject to the conditions of the C Share Placing (a 'Subsequent Placing' under the Placing Programme) in Part 12 of the Prospectus, and to be providing the representations, warranties and acknowledgements contained therein.

A copy of the Prospectus is available on National Storage Mechanism at: https://data.fca.org.uk/a/nsm/nationalstoragemechanism as well as on the Company's website at www.cordiantdigitaltrust.com. Full details of the Terms and Conditions of the C Share Placing are available in the Prospectus.

Expected Timetable

 Placing opens                                      Monday, 17 May 2021 
 Latest time and date for applications   12 noon BST on Tuesday, 8 June 
  under the C Share Placing                                        2021 
 Results of the C Share Placing                    Tuesday, 8 June 2021 
 Admission of the C Shares to             8.00 a.m. BST on Thursday, 10 
  trading and commencement of                                 June 2021 
  dealings on the Specialist Fund 
  Segment of the London Stock 
  Exchange's main market for listed 

The dates and times specified above are subject to change. In particular, the Directors may (with the prior approval of Investec) bring forward or postpone the closing time and date for the C Share Placing. In the event that a date or time is changed, the Company will notify persons who have applied for C Shares by post, by electronic mail or by the publication of a notice through a Regulatory Information Service.

References to all times are to London times unless otherwise stated.

Dealing codes

 Ticker for the C Shares         CCRD 
 ISIN for the C Shares           GG00BMC7TN84 
 SEDOL for the C Shares          BMC7TN8 
 Legal Entity Identifier (LEI)   213800T8RBBWZQ7FTF84 

Unless otherwise defined, capitalised terms used in this Announcement shall have the same meaning as set out in the Prospectus published on 29 January 2021.


For further information, please contact:

 Cordiant Digital Infrastructure Management 
  Stephen Foss, Investor Relations              +44 (0)20 7201 7546 
 Investec Bank plc 
  Sole Financial Adviser, Global Coordinator 
  and bookrunner                                +44 (0)20 7597 4000 
 Tom Skinner ( Corporate Broking ) 
  Lucy Lewis, David Yovichic, Denis Flanagan ( Corporate Finance 
  Dominic Waters, Will Barnett, Neil Brierley ( Sales ) 
 Camarco                                        +44 (0)20 3757 4980 
  Financial Communications Adviser               CordiantDigitalInfra@Camarco.co.uk 
  Louise Dolan 
  Eddie Livingstone-Learmonth 
  Monique Perks 
  Billy Clegg 
 Ocorian Administration (Guernsey) Limited 
  Company Secretary and Administrator 
  Ian Smith 
  Holly Tierney                                 +44 (0)1481 742742 

[1] EBITDA figure is presented on a pre-IFRS 15 & 16 basis, excluding one off items and is based on CZK-GBP and NOK-GBP average exchange rates for the year 2020.

Notes to Editors:

Cordiant Digital Infrastructure Limited primarily invests in the core infrastructure of the digital economy - data centres, fibreoptic networks and broadcast and telecommunication towers - "the plumbing of the internet" - in the UK, Europe and North America. Further details of the Company can be found on the Company's website at www.cordiantdigitaltrust.com.

Cordiant Capital Inc., the Company's investment manager, is a sector-focused investment manager with particular expertise and experience in digital infrastructure. Cordiant invests in global infrastructure and real assets, running infrastructure private equity and infrastructure private credit strategies through limited partnership funds and managed accounts. Cordiant's current client base consists of global insurance companies, pension plans and family offices.

Important Information

This Announcement is an advertisement and does not constitute a prospectus and investors must subscribe for or purchase any C Shares referred to in this Announcement only on the basis of information contained in the Prospectus and not in reliance on this Announcement. Copies of the Prospectus are, subject to any applicable law, available for viewing at the National Storage Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism and on the Company's website.

This Announcement is not an offer to sell or a solicitation of any offer to buy the C Shares in the Company in the United States, Australia, Canada, the Republic of South Africa, Japan, or any member state of the EEA (with the exception of the Republic of Ireland) 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 U.S. Investment Company Act of 1940 (the "Investment Company Act") and, as such, holders of the C Shares will not be entitled to the benefits of the Investment Company Act. No offer, sale, resale, pledge, delivery, distribution or transfer of the C 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.

In the United Kingdom, this communication is being distributed only to, and is directed only at, qualified investors as defined under Article 2 of the Prospectus Regulation: (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. For the purposes of this provision the expression "Prospectus Regulation" means the UK version of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC, which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended by The Prospectus (Amendment, etc) (EU Exit) Regulations 2019.

This communication is only addressed to, and directed at, persons in the Republic of Ireland who are "qualified investors" within the meaning of Article 2(e) of the EEA Prospectus Regulation. For the purposes of this provision, the expression "EEA Prospectus Regulation" means Regulation (EU) 2017/1129. This communication must not be acted on or relied on in any other member state of the EEA.

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 Company. Any such determination should involve, among other things, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of the C Shares or the Ordinary Shares into which they will convert.

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 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 this Announcement 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, Investec 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. This Announcement has not been approved by any competent regulatory or supervisory authority.

The Company has a limited trading history. 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 this Announcement are targets only. There is no guarantee that any returns set out 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.

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, Investec 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 the Company 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.

Prospective investors should take note that, unless otherwise agreed with the Company, the Company'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.

Investec is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulatory Authority. Investec is acting for the Company and no one else in connection with the C Share Placing, and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Investec 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 Investec 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 UK version of Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products and its implementing and delegated acts, which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended by The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019, the Key Information Document relating to the C Shares is available to investors at www.cordiantdigitaltrust.com

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