THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT
FOR RELEASE, PUBLICATION, TRANSMISSION, FORWARDING OR DISTRIBUTION,
DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO OR FROM THE
UNITED STATES OR ANY JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A
VIOLATION OF LOCAL APPLICABLE SECURITIES LAWS OR
REGULATIONS.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF REGULATION (EU) NO 596/2014 WHICH IS PART OF UK LAW
BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR"). UPON
PUBLICATION OF THIS ANNOUNCEMENT, THE INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN FOR THE PURPOSES OF
MAR.
22 February 2024
Harmony Energy Income Trust
plc
(the "Company" or "HEIT")
Debt Refinancing, T-1
Capacity Market Auction Results, and Notice of
Results
Harmony Energy Income Trust plc,
which invests in battery energy storage ("BESS") assets in Great Britain, is
pleased to announce the successful refinancing of its existing debt
arrangements, as well as the results of the recent T-1 Capacity
Market auction.
Amended & Restated Debt Facility
On 21 February 2024 the Company
completed the amendment and restatement of its existing debt
facilities with NatWest plc ("NatWest") and Coöperatieve Rabobank
U.A ("Rabobank").
The new long-term amortising structure is
reflective of the evolving nature of the Company's portfolio from
"construction" to "operational". The changes include:
· the
amalgamation of the previous £110 million term facility and £20
million revolving credit facility into a single combined facility
of £130 million (which is fully drawn);
· an
extension of the legal maturity date from June 2027 to February
2031;
· a
reduction in margin to 275 bps over SONIA for the first two years,
rising over time to a maximum of 350 bps in the final year;
and
· a
re-sizing of market standard debt covenant ratios against
conservative revenue forecasts to ensure ongoing headroom in the
current revenue environment.
The Company expects to put in place
new interest rate hedging arrangements and will disclose further
details in due course. The new margin represents reductions of 25
bps compared to the margin applied on the previous £110 million
term facility and 50 bps compared to the margin applied on the
previous £20 million revolving credit facility.
The structure allows for voluntary
prepayments during the term (subject to a fee) and for cash sweeps
in favour of the lenders in the event of material revenue
outperformance above pre-agreed thresholds, enabling an
acceleration of de-gearing in a cost-efficient manner whilst also
reserving operational free cash flow for shareholder
distributions.
T-1
Capacity Market Auction Results
On 20 February 2024, six of the
Company's BESS assets successfully bid for T-1 Capacity Market
contracts for delivery from 1 October 2024 through to end September
2025. The auction cleared at £35.79/kw/yr, lower than last year but
higher than the Company's expectations. Once de-rating is taken
into account, this increases the Company's contracted revenue for
this period to £3.2 million (circa £8k/MW), of which £1.7 million
has not yet been factored into the Company's modelled cash flows.
The Company's Broadditch and Farnham projects did not participate
in this T-1 Capacity Market auction because their respective T-4
Capacity Market contracts will commence from 1 October 2024 (for
delivery over 15 years) and it is not permitted for a project to
hold two Capacity Market contracts in relation to the same delivery
period.
Notice of Results
The Company expects to publish its
31 January 2024 NAV as well as its annual report and accounts for
the year ended 31 October 2023 on Wednesday 28 February
2024.
Norman Crighton, Chair of Harmony
Energy Income Trust plc, said:
"The debt refinancing provides a
stable platform for the Company to operate in the current lower
revenue environment. This continues to enable the Company to
complete construction of its remaining three projects but now
includes a long term amortisation profile which also provides
flexibility for accelerated de-gearing as opportunities arise
either through asset sales or revenue outperformance. Whilst this
initiative was always planned for 2024 to reflect the transition of
the portfolio to being fully operational, the recent feedback from
shareholders has encouraged us to accelerate our
plans. The Board would like to thank the teams at NatWest and
Rabobank for their continued support, as well as the Investment
Adviser for its hard work over the past few
months".
END
For further information, please
contact:
Harmony Energy Advisors Limited Paul Mason
Max Slade
Peter Kavanagh
James Ritchie
info@harmonyenergy.co.uk
|
|
Berenberg
Ben Wright
Dan Gee-Summons
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+44 (0)20 3207 7800
|
Stifel Nicolaus Europe Limited
Mark Young
Edward Gibson-Watt
Rajpal Padam
Madison Kominski
|
+44 (0)20 7710 7600
|
Camarco Eddie
Livingstone-Learmonth
Andrew Turner
|
+44 (0)20 3757 4980
|
JTC
(UK) Limited Uloma
Adighibe
HarmonyEnergyIncomeTrustPLC@jtcgroup.com
|
+44 (0)20 3832 3877
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LEI: 254900O3XI3CJNTKR453
About Harmony Energy Advisors
Limited (the "Investment Adviser")
The Investment Adviser is a wholly
owned subsidiary of Harmony Energy Limited.
The management team of the
Investment Adviser have been exclusively focused on the energy
storage sector (across multiple projects) in Great Britain for over
seven years, both from the point of view of asset owner/developer
and in a third-party advisory capacity. The Investment
Adviser is an appointed representative of Laven Advisors LLP, which
is authorised and regulated by the Financial Conduct
Authority.
Important
Information
This announcement contains inside
information for the purposes of Article 7 of MAR. Upon publication
of this announcement, the inside information is now considered to
be in the public domain for the purposes of MAR. The person
responsible for arranging the release of this announcement on
behalf of the Company is Harmony Energy Advisors
Limited.
This announcement does not
constitute an offer to sell or the solicitation of an offer to
acquire or subscribe for shares in the Company in any
jurisdiction. This distribution of this announcement outside the UK
may be restricted by law. No action has been taken by the Company
that would permit possession of this announcement in any
jurisdiction outside the UK where action for that purpose is
required. Persons outside the UK who come into possession of this
announcement should inform themselves about the distribution of
this announcement in their particular jurisdiction.
This announcement contains (or may
contain) certain forward-looking statements with respect to certain
of the Company's plans and/or the plans of one or more of its
investee companies and their respective current goals and
expectations relating to their respective future financial
condition and performance and which involve a number of risks and
uncertainties. The Company's target returns are a target only and
there is no guarantee that these will be achieved. This Company
cautions readers that no forward-looking statement is a guarantee
of future performance and that actual results could differ
materially from those contained in the forward-looking
statements.
It should also be noted that any
future NAV per Share announced by the Company in due course will,
in addition to the matters described in this announcement, also be
affected by valuation movements in the Company's portfolio and
other factors including, without limitation, purchase prices
of battery energy storage systems and components, project
development and construction costs, income and pricing from
contracts with National Grid ESO and other counterparties, the
potential for trading profitability in the wholesale electricity
markets and/or Balancing Mechanism, performance of the Company's
investments, and the availability of projects which meet the
Company's minimum return parameters in accordance with the
Company's investment policy .