TIDMNESF
RNS Number : 6111X
NextEnergy Solar Fund Limited
27 April 2023
LEI: 213800ZPHCBDDSQH5447
27 April 2023
NextEnergy Solar Fund Limited
("NESF" or the "Company")
Capital Recycling Programme
NextEnergy Solar Fund, the specialist solar+ fund, has today
launched a capital recycling programme (the "Programme") to
accelerate the next phase of the Company's growth. Through the
Programme, the Company aims to capture significant value from the
divestment of a 236MW portfolio of subsidy-free UK solar assets,
the proceeds from which will be used to:
-- Reduce gearing: materially reduce current drawings of the
Company's revolving credit facilities ("RCF");
-- Invest in future long-term growth opportunities : provide
flexibility to capture higher returning investment opportunities in
the future, such as energy storage; and
-- Buyback shares: establish a share buyback in the future if
the share price continues to trade at a material discount to the
Company's net asset value per share.
NESF has pioneered investment into UK subsidy-free solar since
2017, paving the way for continued renewable investment in the UK
following the withdrawal of subsidy regimes. This effort has been
crucial in attracting new investment into the sector, advancing the
UK's net zero ambitions and energy security. These assets have
created additional value throughout construction and energisation
which the Board and Investment Adviser do not consider to be truly
reflected in the Company's recent share price.
To capture the significant value of these solar assets, NESF has
initiated this Programme to divest a portfolio of five subsidy-free
assets (Hatherden, Whitecross, Staughton, The Grange, and South
Lowfield) and has launched a sales process to find buyers for these
assets, over the coming months. The Programme will deliver Net
Asset Value ("NAV") accretive returns by realising the value
generated through these investments. The Company will retain two
operational subsidy-free assets and remains committed to its
remaining subsidy-free solar pipeline.
Reduce Gearing
At the Interim Results for period ended 30 September 2022, the
Company announced that it had increased the commitments available
under its RCF with AIB Group (UK) & NatWest from GBP75m to
GBP135m. The additional commitments were agreed on attractive terms
with a margin of 120bps over SONIA ("Sterling Overnight Index
Average"), available until June 2024. The Company also signed a
two-year extension to its GBP70m RCF with Santander UK to fund the
investment pipeline. Out of the total GBP205m RCF available to the
Company, c.GBP39m remains undrawn and available for deployment as
of the 31 March 2023. Given the significant increase in interest
rates in recent months, the Board anticipates using net proceeds
from the Programme to reduce the amount of drawn RCF where the
Company has exposure to the high interest rate environment in the
near term. The reduction in gearing will reduce debt service
burden, strengthen free cash flows, and further increase dividend
cover.
Fund Growth Opportunities
The net proceeds of the Programme will also create capacity for
the Company to position itself for its next phase of growth,
including into value-accretive energy storage. The Company has
exclusivity over, or owns the project rights for, the majority of
its pipeline of c.GBP500m UK and international assets across the
solar and energy storage space. This includes ownership of the
development rights for a high-quality 250MW lithium-ion battery
storage project in the East of England, which when constructed will
be one of the UK's largest operational standalone battery storage
assets.
Commitment to buy back shares
The Board operates robust discount monitoring and management
controls and has noted the prolonged period over which the
Company's shares have been trading at a discount to its NAV. The
Company cannot formally instruct a share buyback until the end of
the Company's current close period which runs from the 1 April 2023
through to 19 June 2023. However, the Board continues closely to
monitor the current discount and confirms its commitment to buy
back shares if the share price continues to trade at a material
discount to the Company's net asset value per share.
Conference Call
There will be a short webcast this morning at 9.30am for both
investors and analysts hosted by the investment adviser:
-- Michael Bonte-Friedheim (CEO and Founding Partner of NextEnergy Group)
-- Ross Grier (UK Managing Director, NextEnergy Capital)
-- Stephen Rosser (Investment Director and UK Counsel, NextEnergy Capital)
To register for the webcast please use the following link:
https://www.investormeetcompany.com/nextenergy-solar-fund-limited/register-investor
Unaudited NAV Update
The Company expects to publish its unaudited NAV as at 31 March
2023 during the week ending 12(th) May 2023.
Kevin Lyon, Chairman of NextEnergy Solar Fund, commented :
"NESF's capital recycling programme will provide a significant
boost to shareholder value. The programme intends to crystalise
value from the Company's subsidy-free assets, allowing the Company
to recycle capital throughout its portfolio to reduce gearing and
secure future higher-yielding opportunities for long term
shareholder growth. Taking a dynamic approach to the composition of
the Company's portfolio allows NESF to adapt to current market
conditions and secure capital growth opportunities from its
attractive pipeline."
Michael Bonte-Friedheim, CEO and Founder of NextEnergy Group
said :
"Today's announcement sets out a structured programme for NESF
to benefit from active management of its portfolio, free up
capital, increase shareholder value, and position the Company for
its next wave of growth. NextEnergy Capital has added significant
value to NESF through its investments in subsidy-free solar. A
successful sale process will further demonstrate the value
delivered through these assets and provide an attractive return to
the Company based on recent examples seen in the secondary market.
We look forward to updating shareholders on the progress of the
Programme in due course."
For further information:
NextEnergy Capital 020 3746 0700
Michael Bonte-Friedheim ir@nextenergysolarfund.com
Ross Grier
Stephen Rosser
Peter Hamid (Investor Relations)
RBC Capital Markets 020 7653 4000
Matthew Coakes
Elizabeth Evans
Kathryn Deegan
Cenkos Securities 020 7397 8900
James King
William Talkington
Camarco 020 3781 8334
Owen Roberts
Eddie Livingstone-Learmonth
Ocorian Administration (Guernsey) Limited 014 8174 2642
Kevin Smith
Notes to Editors (1) :
About NextEnergy Solar Fund
NESF is a specialist solar+ fund listed on the premium segment
of the London Stock Exchange and is a constituent of the FTSE 250.
NESF's investment objective is to provide ordinary shareholders
with attractive risk-adjusted returns, principally in the form of
regular dividends, by investing in a diversified portfolio of
utility-scale solar energy and energy storage infrastructure
assets. The majority of NESF's long-term cash flows are
inflation-linked via UK government subsidies.
The NESF portfolio has a combined installed power capacity of
865MW (excluding NextPower III MW on an equivalent look-through
basis). NESF may invest up to 30% of its gross asset value in
non-UK OECD countries, 15% in solar-focused private infrastructure
funds, and 10% in energy storage assets. As at 31 December 2022,
the Company had an unaudited gross asset value of GBP1,252m. For
further information on NESF please visit www.
nextenergysolarfund.com
Table breakdown of 236MW subsidy-free portfolio :
Subsidy-free solar Installed Capacity Status Location
asset
Hatherden 50MW Ready-to-build Hampshire, UK
------------------- ------------------- -----------------
Whitecross 36MW Under construction Lincolnshire,
UK
------------------- ------------------- -----------------
Staughton 50MW Operational Bedfordshire,
UK
------------------- ------------------- -----------------
The Grange 50MW Operational Nottinghamshire,
UK
------------------- ------------------- -----------------
South Lowfield 50MW Operational Yorkshire, UK
------------------- ------------------- -----------------
Article 9 Fund
NESF is classified under Article 9 of the EU Sustainable Finance
Disclosure Regulation and EU Taxonomy Regulation. NESF's
sustainability-related disclosures in the financial services sector
in accordance with Regulation (EU) 2019/2088 can be accessed on the
ESG section of both the NESF & NEC website.
About NextEnergy Group
NESF is managed by NextEnergy Capital, part of the NextEnergy
Group. NextEnergy Group was founded in 2007 to become a leading
market participant in the international solar sector. Since its
inception, it has been active in the development, construction, and
ownership of solar assets across multiple jurisdictions. NextEnergy
Group operates via its three business units: NextEnergy Capital
(Investment Management), WiseEnergy (Operating Asset Management),
and Starlight (Asset Development).
-- NextEnergy Capital: Ha s over 16 years specialist solar
expertise having invested in over 350 individual solar plants
across the world. NextEnergy Capital currently manages four
institutional funds with a total capacity in excess of 2.4GW+ and
has asset under management of $3.3bn. www.nextenergycapital.com
-- WiseEnergy(R): Provides solar asset management, monitoring
and technical due diligence services to over 1,350 utility-scale
solar power plants with an installed capacity in excess of 1.8GW.
WiseEnergy clients comprise leading banks and equity financiers in
the energy and infrastructure sector. www.wise-energy.com
-- Starlight: H as d eveloped over 100 utility-scale projects
internationally and continues to progress a large pipeline of
c.10GW of both green and brownfield project developments across
global geographies.
Notes:
(1:) All financial data is unaudited at 31 December 2022, being
the latest date in respect of which NESF has published financial
information
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