TIDMSEIT
RNS Number : 4027C
SDCL Energy Efficiency Income Tst
19 October 2020
19 October 2020
SDCL Energy Efficiency Income Trust plc
("SEEIT" or the "Company")
Acquisition of a Swedish regulated gas distribution network
SDCL Energy Efficiency Income Trust plc, the first UK-listed
investment company of its kind to invest exclusively in the energy
efficiency sector, has agreed to acquire a 100% interest in Värtan
Gas Stockholm AB ("VGSAB"), the ultimate owner of the established,
operational and regulated gas distribution network for Stockholm ,
Sweden, involving an equity investment of approximately GBP100
million.
The VGSAB group (the "Group") owns and operates Stockholm's
regulated gas grid, the majority of which is sourced from locally
produced biogas (c.70%). The Group supplies and distributes to over
58,000 residential, commercial, industrial, transportation and real
estate customers in Stockholm. It is an essential infrastructure
service that helps to reduce pollution and greenhouse gas emissions
by reducing and reusing waste gases both at the point of
production, for example at municipal waste water treatment plants
and, at the point of use, through the displacement of natural gas
in buildings and diesel in transport. SEEIT intends to work towards
increasing the proportion of green gas in the network to 100% over
time. The grid is an essential component of an integrated system,
aligned with national and regional strategies to attain carbon
neutrality by 2040.
The Group's revenues, which are primarily regulated, are
predominantly based on fixed tariffs with relatively low
sensitivity to customer demand or consumption. The Investment
Manager believes that, in addition to existing revenues, there are
opportunities for growth, for example from serving new transport
customers, as commercial and municipal vehicle fleets continue to
switch to cleaner fuels, including biogas. In addition, there are
opportunities to deliver new energy and infrastructure services to
customers by developing the network and through vertical
integration.
The investment is expected to meet and exceed SEEIT's total
returns targets and to further support its progressive dividend
policy.
The acquisition will be funded from existing cash reserves and
debt facilities , which include the capital raised in the recent
equity fundraising and a GBP30 million short term acquisition
facility that has been added to SEEIT's current GBP40 million
revolving credit facility. VGSAB's existing project debt finance
facilities, which are equivalent to c.GBP26 million, will remain in
place.
Completion of the acquisition is expected in the coming weeks,
after satisfaction of certain customary conditions and
consents.
Commenting on the acquisition, Jonathan Maxwell, CEO and Founder
of Sustainable Development Capital LLP, said:
"SEEIT is making an investment in an important infrastructure
asset for the City of Stockholm. It provides an attractive
opportunity for SEEIT to invest in an established energy network
that helps with greenhouse gas emission reductions and for SEEIT to
help make it greener. The operational investment offers the
opportunity for an attractive level of income and for significant
growth over the medium to long term. We are pleased to agree this
investment immediately following our successful fund-raising."
For Further Information
Sustainable Development Capital T: +44 (0) 20 7287 7700
LLP
Jonathan Maxwell
Purvi Sapre
Eugene Kinghorn
Keith Driver
Jefferies International Limited T: +44 (0) 20 7029 8000
Tom Yeadon
Gaudi le Roux
TB Cardew T: +44 (0) 20 7930 0777
Ed Orlebar M: +44 (0) 7738 724 630
Joe McGregor E: SEEIT@tbcardew.com
About SEEIT
SDCL Energy Efficiency Income Trust plc is the first UK listed
company of its kind to invest exclusively in the energy efficiency
sector. Since IPO, SEEIT has now made nine investments and
commitments in a diversified portfolio of distributed generation
and energy efficiency projects totalling c.GBP500 million. The
projects are primarily located in the UK, Europe and North America
in broadly equal proportions and include, inter alia, a portfolio
of cogeneration assets in Spain, a portfolio of recycled energy and
cogeneration projects in the United States and, most recently,
investments and commitments in operational and construction assets
in the UK and Singapore.
The Company aims to deliver shareholders value through its
investment in a diversified portfolio of energy efficiency projects
which are driven by the opportunity to deliver lower cost, cleaner
and more reliable energy solutions to end users of energy.
The Company is targeting an attractive total return for
shareholders of 7-8 per cent. per annum (net of fees and expenses
and by reference to the initial issue price of GBP1.00 per Ordinary
Share), with a stable dividend income, capital preservation and the
opportunity for capital growth. The Company is targeting a dividend
of 5.5p per share in respect of the financial year to 31 March
2021. SEEIT's last published NAV was 101.0p per share as at 31
March 2020.
Further information can be found on the Company's website at
www.seeitplc.com .
Investment Manager
SEEIT's investment manager is Sustainable Development Capital
LLP ("SDCL"), an investment firm established in 2007, with a proven
track record of investment in energy efficiency and decentralised
generation projects in the UK, Continental Europe, North America
and Asia.
SDCL is headquartered in London and also operates worldwide from
offices in New York, Dublin, Madrid, Hong Kong and Singapore. SDCL
is authorised and regulated in the UK by the Financial Conduct
Authority.
Further information can be found on at www.sdclgroup.com .
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