Migration to Trading on the Premium Segment

RNS Number : 1269X

Digital 9 Infrastructure PLC

24 August 2022

 

NEITHER THIS ANNOUNCEMENT NOR ANYTHING HEREIN FORMS THE BASIS FOR ANY OFFER TO PURCHASE OR SUBSCRIBE FOR ANY SHARES OR OTHER SECURITIES IN  DIGITAL 9 INFRASTRUCTURE PLC  NOR SHALL IT FORM THE BASIS FOR ANY CONTRACT OR COMMITMENT WHATSOEVER.

24 August 2022

Digital 9 Infrastructure plc

("DGI9" or the "Company") 

Migration to Trading on the Premium Segment of the Main Market of the London Stock Exchange and Admission to the Premium Listing Segment of the Official List of the FCA

Further to the announcement of 15 August 2022, the Board of Digital 9 Infrastructure plc is pleased to announce that it has received confirmation from the Financial Conduct Authority (the "FCA") that the Company is eligible for the admission of its ordinary shares (the "Ordinary Shares") to the premium listing segment of the Official List of the FCA.

Accordingly, the Company has made applications to the FCA and London Stock Exchange plc (the "London Stock Exchange"), respectively, for admission of the Ordinary Shares to the premium listing segment of the Official List of the FCA and for a transfer of the Ordinary Shares from trading on the Specialist Fund Segment to the Premium Segment of the Main Market of the London Stock Exchange (the "Migration").

The Board believes that the Company will benefit over time from the Migration with an increase of its profile as an investment company, diversification of the Company's share register with access to blue chip UK and international investors, as well as from potential FTSE index inclusion.

Admission is expected to occur with effect from 8.00 a.m. on 30 August 2022 ("Admission").

The Company's existing ticker, ISIN, LEI and SEDOL will remain unchanged.

Working capital

In accordance with LR6.7.1R, the Company is of the opinion that the working capital available to the Group (as defined below) is sufficient for its present requirements, that is for at least the next 12 months from the date of this announcement.

Investment Policy

As a result of the eligibility review, the Company has agreed with the FCA to make certain non-material amendments to its Investment Policy. Specifically, the Company has agreed that any maintenance, repairs and expansion capital expenditure, including investment into new assets via an existing Investee Company, will be required to be within the overall Size Restriction (as defined below).

The amended Investment Policy, which has been approved by the Board, is set out in the Appendix to this announcement.

FOR FURTHER INFORMATION

Triple Point Investment Management      Thor Johnsen / Andre Karihaloo	[phone]
J.P. Morgan Cazenove      William Simmonds / Jérémie Birnbaum (Corporate Finance)      James Bouverat / Liam MacDonald-Raggett (Sales)	[phone]
Akur Capital       Tom Frost / Anthony Richardson / Siobhan Sergeant	[phone]
FTI Consulting     Mitch Barltrop / Gina Magnin	[phone] [phone] [e-mail]

LEI: 213800OQLX64UNS38U92

IMPORTANT INFORMATION

Each of Akur Limited ("Akur")  (which is regulated in the  UK  by the FCA) and J.P. Morgan Securities plc (which conducts its UK investment banking activities as "J.P. Morgan Cazenove") (which is authorised by the Prudential Regulation Authority (the "PRA) and regulated in the  UK  by the FCA and the PRA), is acting exclusively for the Company and for no‐one else in connection with the Migration and other matters described in this announcement and will not regard any other person as its client in relation thereto and will not be responsible to anyone for providing the protections afforded to its clients or providing any advice in relation to the matters described herein. Neither Akur nor J.P. Morgan Cazenove, nor any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for this announcement, its contents or otherwise in connection with it or any other information relating to the Company, whether written, oral or in a visual or electronic format.

NOTES TO EDITORS:

Digital 9 Infrastructure plc (DGI9) is an investment trust listed on the London Stock Exchange with ticker DGI9. The Company invests in the infrastructure of the internet that underpins the world's digital economy: digital infrastructure.

The number 9 in Digital 9 Infrastructure comes from the UN Sustainable Development Goal 9, which focuses the fund on investments that increase connectivity globally and improve the sustainability of digital infrastructure. The assets DGI9 invest in typically comprise scalable platforms and technologies including (but not limited to) subsea fibre, data centres, terrestrial fibre, and wireless networks.

From its IPO in March 2021 and four subsequent placings, DGI9 has raised total equity of £905 million   and a revolving credit facility of £375 million,   and invested into the following data centres, subsea fibre and wireless networks:

·   Aqua Comms , a leading owner and operator of 20,000km of the most modern subsea fibre systems - the backbone of the internet - with a customer base comprising global tech and global telecommunications carriers (April 2021);

· Verne Global , the leading Icelandic data centre platform, with 40MW of high intensity computing solutions in operation or development, powered by 100% baseload renewable power (September 2021);

· EMIC-1 , a partnership with Meta on a 10,000km fibre system from Europe to India (July 2021);

· SeaEdge UK1 , a data centre and landing station for the North Sea Connect subsea cable, part of the North Atlantic Loop subsea network, improving connectivity between the UK, Ireland, Scandinavia and North America (December 2021);

· Host Ireland , a leading enterprise broadband provider that owns and operates Fixed Wireless Access networks (April 2022);

· Volta , a   premier data centre based in central London, providing 6MW retail co-location services (April 2022);

· Ficolo , a leading Finnish data centre and cloud infrastructure platform, with c.23MW of data centre capacity, powered by 100% renewable power and distributing surplus heat to district heating networks (July 2022) ; and

·   A rqiva , the only national terrestrial television and radio broadcasting network in the United Kingdom - providing data, network and communications services, as well as a national IoT connectivity platform (announced June 2022).

The Investment Manager is Triple Point Investment Management LLP ("Triple Point") which is authorised and regulated by the Financial Conduct Authority, with extensive experience in infrastructure, real estate and private credit, while keeping ESG principles central to its business mission. Triple Point's Digital Infrastructure team has over US$ 300 billion in digital infrastructure transaction experience and in-depth relationships across global tech and global telecoms companies. For more information, please visit   www.triplepoint.co.uk.

The Company's Ordinary Shares were admitted to trading on the Specialist Fund Segment of the Main Market of the London Stock Exchange on 31 March 2021.

For more information, please visit  www.d9infrastructure.com .

APPENDIX

Investment policy

The Company intends to achieve its investment objective by investing in a diversified portfolio of Digital Infrastructure Investments which provide key infrastructure for global data transfer (subsea fibre-optic networks, wireless networks and terrestrial fibres) and data storage (data centres), all of which contribute to facilitating global digital communication.

The Company is focused on the provision of Digital Infrastructure integrated with green and cleaner power in line with UN Sustainable Development Goal 9: "Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation".

The Company seeks to invest in assets or Investee Companies which typically have secured medium to long term contracts underpinned by high quality counterparties.

The Company invests (directly or via subsidiary companies) in a range of Digital Infrastructure assets which deliver a reliable, functioning internet. The portfolio will typically comprise future proofed, non-legacy, scalable platforms and technologies including (but not limited to) subsea fibre, data centres, terrestrial fibre, tower infrastructure and small cell networks which meet the following criteria:

•    assets and Investee Companies which deliver communications, data transfer, interconnectivity and data storage;

•      assets and Investee Companies which derive a significant proportion of their revenues from high quality counterparties (meaning, for these purposes, companies (or their parent companies) which are included in the FTSE 350 (or equivalent) or which are investment-grade rated by a recognised grading agency) and/or a diversified portfolio of counterparties that, by reason of its diversity, is resilient and well placed to weather economic downturns;

•        assets and Investee Companies with high cash flow visibility and resilience, specifically from medium to long term contracts or from a diversified portfolio of shorter term contracts providing essential underlying services.

The Group focuses, primarily, on Digital Infrastructure Investments where the assets (or Investee Companies which own the assets) are operational and, where appropriate, there is a contract in place with the end user and/or off-taker. Where suitable opportunities arise, however, the Group may provide limited funding during the Construction Phase or Development Phase of a Digital Infrastructure asset, in particular, on a forward funding basis where development risk for the Company is limited, subject to the restrictions set out below.

Investment restrictions

The Company invests and manages its assets with the objective of spreading risk and, in doing so, will maintain the following investment restrictions:

•       the Company will not invest more than 25 per cent. of Adjusted Gross Asset Value in any single asset or Investee Company. When the Gross Asset Value reaches £2 billion (as notified by the Company in its annual or half year financial results report), this restriction will change to 20 per cent. of Adjusted Gross Asset Value;

•        investments will be focused on acquiring a controlling interest (meaning more than a 50 per cent. interest) in the relevant investment assets or Investee Companies being acquired or invested in but can also comprise minority interests (where appropriate minority protections are in place);

•        at least 50 per cent. of Adjusted Gross Asset Value will be invested in developed markets, in particular (but not limited to), the UK, EU and US;

•        neither the Company nor any of its subsidiaries will invest in any assets or Investee Companies located in or with co-investment exposure to any Restricted Territories;

•     neither the Company nor any of its subsidiaries will invest in any assets or Investee companies using technologies or equipment under any current prohibition ruling by relevant UK, EU, or US authorities, unless such equipment is in the process of being removed in line with the guidelines of such UK, EU or US authorities;

•       the Company may invest a limited amount in assets (or Investee Companies which own assets) which are predominantly in construction, which typically will be undertaken via a forward funding arrangement which pays a return during the Construction Phase, with any investments which expose the Company to development risk limited to, in aggregate, no more than 5 per cent. of Adjusted Gross Asset Value, and the aggregate value of assets in construction or development being no more than 20 per cent. of Adjusted Gross Asset Value (such amount to be calculated as the aggregate value of all material construction or development activities, including forward funded developments, within Investee Companies);

•       neither the Company nor any of its subsidiaries will invest in any listed entities, or in private closed-ended investment companies or any funds of any kind; and

•       the Company itself will not conduct any trading activities which are significant in the context of the Group as a whole.

Compliance with the above investment limits will be measured at the time of investment and non-compliance resulting from changes in the price or value of assets following investment will not be considered as a breach of the investment limits.

For the purposes of the foregoing, the term "Adjusted Gross Asset Value" shall mean the aggregate value of the total assets of the Company as determined with the accounting principles adopted by the Company from time to time as adjusted to include any third-party debt funding drawn by, or available to, any Group company (which, for the avoidance of doubt, excludes Investee Companies).

Borrowing Policy

The Directors do not intend to use gearing at the Company level, other than utilising short-term credit facilities for financing acquisitions (which could be at the level of the Company or a Group company (which, for the avoidance of doubt, excludes Investee Companies)), such borrowings to be at a Conservative level. Intragroup debt between the Company and its subsidiaries, and the debt of Investee Companies, will not be included in the definition of borrowings for these purposes.

Long term gearing is likely to be applied at an Investee Company level in order to enhance returns but will be at a prudent level, appropriate for the particular Investee Company and sub-sector.

Hedging and Derivatives

The Company will not employ derivatives for investment purposes. Derivatives may however be used for efficient portfolio management. In particular, the Company may engage in interest rate or currency hedging or otherwise seek to mitigate the risk of interest rate increases and currency movements.

The Group will only enter into hedging contracts and other derivative contracts when they are available in a timely manner and on acceptable terms. The Company reserves the right to terminate any hedging arrangement in its absolute discretion. Any such hedging transactions will not be undertaken for speculative purposes.

Cash management

The Company may hold cash on deposit for working capital purposes and awaiting investment and, as well as cash deposits, may invest in cash equivalent investments, which may include government issued treasury bills, money market collective investment schemes, other money market instruments and short-term investments in money market type funds ("Cash and Cash Equivalents"). There is no restriction on the amount of Cash and Cash Equivalents that the Company may hold and there may be times when it is appropriate for the Company to have a significant Cash and Cash Equivalents position.

Defined Terms

Adjusted Gross Asset Value	The aggregate value of the total assets of the Company as determined with the accounting principles adopted by the Company from time to time as adjusted to include any third-party debt funding drawn by, or available to, any Group company (which, for the avoidance of doubt, excludes Investee Companies).
Admission	the admission of the Company's ordinary share capital to trading on the Premium Segment of the Main Market of the London Stock Exchange
Board	the board of directors of the Company
Conservative	In respect of the Company's borrowing policy, the level of any short term revolving credit facility put in place by the Company will be determined by the quality of the investments to be made, including the covenant strength of counterparties within the proposed Investee Company, the terms available to the Company and the timeframe for which such short term borrowings are expected to be required. In any event, the aggregate level of borrowings will be expected to be no more than a maximum of 50 per cent. of Adjusted Gross Asset Value.
Construction Phase	in respect of a new development project, the phase where contracts have been agreed and relevant permits are in place.
CTA 2010	Corporation Tax Act 2010 and any statutory modification or re-enactment thereof for the time being in force
Development Phase	in respect of a new development project, the initial phase before relevant contracts or permits are in place.
Digital Infrastructure	key services and technologies that enable methods, systems and processes for the provision of reliable and resilient data storage and transfer.
Digital Infrastructure Investments	an investment which falls within the parameters of the Company's investment policy and which may include (but is not limited to) an investment into or acquisition of an Investee Company or a direct investment in Digital Infrastructure assets or projects via an Investment SPV or a forward funding arrangement.
EU or European Union	The European Union first established by the treaty made at Maastricht on 7 February 1992
FCA	the Financial Conduct Authority
Gross Asset Value	the aggregate value of the total assets of the Company as determined with the accounting principles adopted by the Company from time to time.
Group	the Company and any other companies in the Company's group for the purposes of Section 606 of CTA 2010 from time to time, but excluding Investee Companies
Investee Company	a company or special purpose vehicle which owns and/or operates digital infrastructure assets or projects in which the Group invests or acquires
Investment SPV	a special purpose vehicle used to acquire or own one or more Digital Infrastructure Investments.
London Stock Exchange	London Stock Exchange plc
Migration	the transfer of the Company's Ordinary Shares from trading on the Specialist Fund Segment to the Premium Segment of the Main Market of the London Stock Exchange and admission to the premium listing segment of the Official List
Official List	the official list maintained by the FCA pursuant to Part VI of the Financial Services and Markets Act 2000 (and any statutory modification or re-enactment for the time being in force)
Ordinary Shares	ordinary shares of no par value in the capital of the Company
Restricted Territories	The Republic of China, Democratic People's Republic of Korea (North Korea), Russia, Iran and Syria.
Size Restriction	the investment restriction contained within the Company's Investment Policy which states: "…the Company will not invest more than 25 per cent. of Adjusted Gross Asset Value in any single asset or Investee Company. When the Gross Asset Value reaches £2 billion (as notified by the Company in its annual or half year financial results report), this restriction will change to 20 per cent. of Adjusted Gross Asset Value."
UK or United Kingdom	The United Kingdom of Great Britain and Northern Ireland
US or United States	The United States of America, its territories and possessions, any state of the United States and the District of Columbia

 

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