Publication of Prospectus

RNS Number : 9353B

Renewables Infrastructure Grp (The)

10 March 2014

 



THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA.

This announcement is an advertisement and not a prospectus. Investors should not purchase or subscribe for any transferable securities referred to in this announcement except on the basis of information contained in the prospectus published today by The Renewables Infrastructure Group Limited in connection with the placing, open offer and offer for subscription of C shares (the "C Shares") and the admission of C shares  to the standard segment of the Official List of the Financial Conduct Authority (the "Official List") and to trading on London Stock Exchange plc's main market ("Main Market") for listed securities (the "London Stock Exchange"). This announcement is not an offer to sell, or a solicitation of an offer to acquire, securities in the United States or in any other jurisdiction. Neither this announcement nor any part of it shall form the basis of or be relied on in connection with or act as an inducement to enter into any contract or commitment whatsoever.

THE RENEWABLES INFRASTRUCTURE GROUP LIMITED

Placing, Open Offer and Offer for Subscription of C Shares

and

Publication of a Prospectus and Circular

10 March 2014

Summary

Further to the statement made by The Renewables Infrastructure Group Limited (the "Company") on 26 February 2014 as part of the Company's announcement of its results for the period to 31 December 2013, the Board of Directors is pleased to announce a Placing, Open Offer and Offer for Subscription with a target size of 85 million C Shares at an issue price of 100p per C Share (the "Issue").  The Company has today published a prospectus relating to the Issue (the "Prospectus") and a circular to shareholders (the "Circular"), both of which will be posted to shareholders shortly, as well as being made available on the Company's website (www.trig-ltd.com).

Unless otherwise defined, capitalised words and phrases in this Announcement shall have the meaning given to them in the Prospectus.

Key Highlights of and Reasons for the Issue

·    Placing, Open Offer and Offer for Subscription with a target size of 85 million C Shares at an issue price of 100p per C Share (to raise £85 million before expenses) with the ability to increase the size of the Issue to a maximum of 120 million C Shares (to raise £120 million before expenses), depending on progress with the pipeline of Additional Investments.

·    The C Shares, which are being issued to fund the pipeline of Additional Investments by the Group, will convert into Ordinary Shares on a NAV for NAV basis at the time of conversion (which will occur no later than 31 July 2014).  The New Ordinary Shares arising on conversion will be entitled to the interim dividend of 3p per Ordinary Share which the Company is targeting to pay in September 2014 in respect of the 6 month period ending June 2014.

·    The Group has entered into exclusivity agreements in relation to the proposed acquisition of five projects - two solar PV and three onshore wind in the UK and Ireland - representing approximately 78MW of aggregate generating capacity for a total expected consideration of approximately £85 million. These assets will increase TRIG's total generating capacity by approximately 27% to 366MW. In addition, a range of other projects have been identified with a generating capacity in excess of 200MW for which discussions have commenced. Further details can be found below under "Background to the Issue".

·    As a result of the Issue, the Company will not only benefit from a larger and more diversified portfolio but also from a more diversified shareholder base, greater liquidity in the secondary market and economies of scale in relation to the Company's expenses. The Issue has been undertaken as a C Share issue to ensure that Existing Shareholders do not suffer NAV dilution. In addition, a substantial proportion of the C Shares are being made available in the first instance to Qualifying Shareholders through the Open Offer pursuant to which they will be entitled to 1 C Share for every 4 Ordinary Shares held on the Record Date (being 6 March). The balance of C Shares (being 7.5 million shares at the target Issue size of 85 million C Shares, together with any C Shares not taken up under the Open Offer), will be made available under the Offer for Subscription and the Placing.

Richard Crawford of InfraRed Capital Partners, said:

"The team is delighted to have sourced further opportunities for TRIG in solar PV and onshore wind - including five at an advanced stage of exclusivity.  In light of a good set of maiden results and demand from investors for predictable long-term yield, TRIG is raising additional equity capital. This will enable a broader range of investors to participate in TRIG with the benefits of diversification and increased share liquidity."

Expected timetable

Each of the times and dates set out below and mentioned elsewhere in this announcement (other than the date of the General Meeting) may be adjusted by the Company, in which event details of the new times and dates will be notified to the Financial Conduct Authority and the London Stock Exchange.  References to a time of day are to London time.

Event	Date (2014)
Record Date for entitlement under the Open Offer Publication and posting of the Prospectus, Circular, Forms of Proxy and Application Forms Offer for Subscription opens and Placing opens Ex-entitlement date for the Open Offer Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to stock accounts of Qualifying CREST Shareholders in CREST Recommended latest time for requesting withdrawal of Open Offer Entitlements and Excess CREST Open Offer Entitlements Latest time and date for depositing Open Offer Entitlements and Excess CREST Open Offer Entitlements into CREST Latest time and date for splitting of Open Offer Application Forms (to satisfy bona fide market claims only) Latest time and date for receipt of Forms of Proxy Latest time and date for receipt of completed application forms and payment in full under the Offer for Subscription	Close of business on Thursday, 6 March Monday, 10 March Monday, 10 March 8.00 a.m. on Tuesday, 11 March Tuesday, 11 March 4.30 p.m. on Thursday, 20 March 3.00 p.m. on Friday, 21 March 3.00 p.m. on Monday, 24 March 10.00 a.m. on Wednesday, 26 March 11.00 a.m. on Wednesday, 26 March
Latest time and date for receipt of completed Open Offer Application Forms and payment in full under the Open Offer or settlement of relevant CREST instruction (as appropriate)	11.00 a.m. on Wednesday, 26 March
Latest time and date for receipt of Placing commitments	Midday on Thursday, 27 March
General Meeting	10.00 a.m. on Friday, 28 March
Results of the Issue announced Admission to the Official List and commencement of dealings in C Shares	Friday, 28 March 8.00 a.m. on Wednesday, 2 April
Expected date for crediting of C Shares to CREST accounts in uncertificated form	8.00 a.m. on Wednesday, 2 April
Expected date of despatch of definitive share certificates for  C Shares in certificated form Latest date for conversion of C Shares into Ordinary Shares	Week commencing 7 April By 31 July

Introduction

The Company is a limited liability, Guernsey-incorporated, closed-ended investment company whose Ordinary Shares have a premium listing on the Official List and are traded on the Main Market of the London Stock Exchange.  The Company seeks to provide investors with long-term, stable dividends, whilst preserving the capital value of its investment portfolio principally through investment in a range of operational assets which generate electricity from renewable energy sources, with a particular focus on onshore wind farms and solar PV parks.  The Company is targeting an annualised dividend of 6 pence per Ordinary Share which the Board aims to increase progressively in line with inflation over the medium term.

The Current Portfolio consists of 20 distinct, wholly-owned assets in the UK, France and the Republic of Ireland, 14 of which are operating onshore wind projects (representing generating capacity of approximately 256 MWs) and six of which are solar PV projects (with generating capacity of approximately 32 MWs).  The assets in the Current Portfolio have a weighted average operational history of approximately five years. 

InfraRed Capital Partners Limited - the Investment Manager ("InfraRed")

·    InfraRed is a leading international fund manager specialised in managing real assets with a 20 year history of investments.

·    15+ year track record in raising and managing 15 successful infrastructure and real estate funds with, currently, more than US$7 billion of equity under management.

·    InfraRed launched, and manages, HICL Infrastructure Company Limited, currently the largest of the London-listed infrastructure investment companies with a market capitalisation of £1.6 billion.

Renewable Energy Systems Limited - the Operations Manager ("RES")

·    RES, one of the world's leading renewable energy developers, is a privately owned sister company of Sir Robert McAlpine Ltd.

·    Extensive, 30+ year experience in developing, constructing and/or operating renewable energy projects globally, including onshore and offshore wind, solar and biomass.

·    More than 130 wind energy generation projects completed (more than 8,000 MW in total).

Background to the Issue

The Investment Manager continues to identify new renewables infrastructure investment opportunities for the Company.

The Company has entered into exclusivity agreements in relation to the proposed acquisition of the following additional investments ("Exclusive Investments") for an aggregate consideration of approximately £85 million:

Two Solar Parks, Southern England

The Company is in advanced stages of exclusive negotiation to acquire two fully permitted, ground mounted solar PV projects with a total capacity of approximately 30MW located in Southern England. Both projects are under construction and expected to be completed by 31 March 2014, achieving 1.6 ROC accreditation, although this may slip to after 31 March 2014 in which case the purchase price will be adjusted to reflect accreditation at 1.4 ROC. The expected project life is 25 years. It is intended that the acquisitions of these two projects will be funded from, in the first instance, the Company's available cash with the balance being funded by a drawdown under the Acquisition Facility, with the latter to be fully repaid from the Net Issue Proceeds. The investments have no project-level debt, although this may be introduced in due course to optimise the capital structure. Completion is expected in March 2014.

Taurbeg Wind Farm, Republic of Ireland

The Company has entered into an exclusivity agreement for the acquisition of Taurbeg Wind Farm from the RES Group. This is an operational merchant wind farm near Rockchapel in County Cork, Ireland with an installed capacity of approximately 25MW. The project received full planning permission in February 2003 and began operating in March 2006. It comprises 11 Siemens 2.3MW turbines and was developed by the RES Group with Siemens as O&M contractor. Forecast revenues are entirely market based. Production is currently sold directly into the SEM pool. PPAs are in negotiation. The project has no debt, although debt may be introduced in due course to optimise the capital structure.

Tallentire Wind Farm, England

The Company has entered into an exclusivity agreement for the acquisition of Tallentire Wind Farm, located in Cumbria, England from the RES Group. It consists of six Vestas V80 2.0MW wind turbines with a total capacity of 12MW, was constructed by the RES Group and became operational in May 2013. The project benefits from a 15 year PPA with Statkraft expiring in 2028. Asset management services are provided by RES and Vestas is responsible for the monitoring and maintenance of the turbines.

Meikle Carewe Wind Farm, Scotland

The Company has entered into an exclusivity agreement for the acquisition of Meikle Carewe Wind Farm from the RES Group. The project is located in Scotland, near Aberdeen. It consists of 12 Gamesa G52-850kW wind turbines with a total installed capacity of approximately 10MW, was constructed by the RES Group and became operational in July 2013. The project benefits from a 15 year PPA with Statkraft expiring in 2028. Asset management services are provided by RES and Gamesa is responsible for the monitoring and maintenance of the turbines.

The Tallentire and Meikle Carewe wind farms are subject to a single project financing facility with KfW-IPEX-Bank GmbH as lender. Completion of the acquisition of the RES Wind Farms is expected to occur in the second quarter of 2014, subject to additional due diligence which is currently underway.

The acquisition of each of the Exclusive Investments is subject to the signing of a sale and purchase agreement in respect of the relevant investment and there can be no guarantee that this will take place. Further details of these acquisitions will be announced upon the Group entering into legally binding agreements in respect of these respective transactions.

In addition to the Exclusive Investments described above, the Company has the contractual right of first offer over other assets developed by RES (predominantly newly developed onshore wind assets) in the UK and Northern Europe and the Investment Manager has identified a range of other potential additional investments with generating capacity in excess of 200MW for which discussions have commenced with parties other than RES (together, the "Pipeline Projects"). The Company also has access to the resources of both RES and InfraRed in sourcing assets more broadly from utilities and other developers or owners of renewables assets. The Company anticipates that acquisition of any Pipeline Projects will be financed in part through the Acquisition Facility which will normally be repaid within 12 months, through the issuance of new equity, as well as through the accumulation over time of surplus cash flows from the Portfolio after the payment of the target dividend and through tap issues of new equity where appropriate.

In light of the pipeline of further attractive acquisition opportunities identified by the Investment Manager, in the form of both solar PV parks and onshore wind farms from third parties, other InfraRed Funds and from the Operations Manager, the Directors consider that it would be beneficial for the Company to raise additional capital through the issue of C Shares, both to repay any amounts which may be drawn under the Acquisition Facility and to fund the acquisition of additional investments.

The Issue

The Company is now seeking to raise £85 million (before expenses) through the Placing, Open Offer and Offer for Subscription of C Shares. The Directors have also reserved the right, in consultation with Canaccord Genuity Limited and Jefferies International Limited (the "Joint Bookrunners") and the Investment Manager, to increase the size of the Issue to a maximum of £120 million to the extent that Additional Investments have been identified prior to the Placing Date and overall demand for C Shares exceeds the target amount.

The Company will first apply the Net Issue Proceeds to repay any amounts drawn down under the Acquisition Facility and, depending on the amount of proceeds raised, to provide the Group with additional resources to acquire the Additional Investments. The Group will only make Additional Investments to the extent that the debt outstanding after such acquisition or acquisitions would be at a level that the Board considers prudent, having regard to the terms of the Acquisition Facility.

The Directors believe that the use of C Shares is the most appropriate way by which to raise the additional equity as it ensures that the full costs of the Issue will be paid by the C Share subscribers, as well as ensuring that those new subscribers gain exposure to the Current Portfolio by reference to its Net Asset Value at a pre-determined date. The costs of the Issue will not exceed two per cent. of the Gross Issue Proceeds. Under the terms of the Articles, any C Shares issued by the Company convert into New Ordinary Shares on the basis of a Net Asset Value for Net Asset Value basis at the time of conversion. In this way, existing Ordinary Shareholders will suffer no dilution in Net Asset Value terms as a result of the issue of the C Shares or their conversion into New Ordinary Shares.

The Issue, which is conditional inter alia, on approval by Existing Shareholders at the General Meeting (further details of which are provided below), is being implemented by way of a Placing, Open Offer and Offer for Subscription. The Open Offer ensures that a significant portion of the C Shares available under the Issue is reserved in the first instance for Existing Shareholders.

Under the Open Offer, Existing Shareholders are entitled to subscribe for an aggregate of 77.5 million C Shares pro rata to their holdings of Ordinary Shares on the Record Date (being the close of business on 6 March 2014) as follows:

1 C Share for every 4 Ordinary Shares held at the Record Date
(being the close of business on 6 March 2014)

The C Shares will convert into New Ordinary Shares on the basis of the Conversion Ratio which will be calculated on the earlier of (i) at least 80 per cent. of the assets attributable to the C Shares having been invested; and (ii) 30 June 2014. 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. Subject to the passing of both of the Resolutions at the General Meeting (on which the Issue is conditional), the latest date for calculating the Conversion Ratio will be 30 June 2014, with Conversion of the C Shares into New Ordinary Shares taking place before 31 July 2014 so that the Ordinary Shares will be entitled to the dividend which the Company is targeting to pay in September 2014 for the 6 month period ending on 30 June 2014.

Benefits of the Issue

The Directors expect the Issue to have the following benefits:

•        the Issue will provide additional capital which will enable the Company to benefit from the continued investment opportunities in the renewable energy markets;

•        having a greater number of Ordinary Shares (following the conversion of the C Shares into New Ordinary Shares) is likely to provide Shareholders with increased secondary market liquidity;

•        increasing the size of the Company will help make the Company more attractive to a wider investor base and, following the acquisition of Additional Investments, the diversity of the Portfolio will be increased; and

•        the Company's fixed running costs will be spread across a larger shareholder base, thereby reducing the Company's total expense ratio.

General Meeting

The Company has today posted to shareholders the Circular to convene a general meeting to be held at 10.00 a.m. on 28 March 2014 (the "General Meeting") in order to seek shareholder approvals in connection with the Issue.  The resolutions to be proposed at the General Meeting (the "Resolutions"), as an ordinary resolution and special resolution respectively, are as follows:

-           To approve the Issue and the allotment of up to 120 million C Shares on a non- pre-emptive basis, being the maximum number of C Shares that could be issued pursuant to the Issue (such authority to expire on 16 May 2014);

-           To approve an amendment to the conversion rights attaching to the C Shares as set out in the Articles, so as to provide flexibility for the Board in determining the most appropriate longstop date for conversion in respect of each issue of C Shares.

Forms of Proxy in respect of the Resolutions should be returned by no later than 10.00 a.m. on 26 March 2014.

Directors' intention to subscribe

As at the date of the prospectus, the Directors intend to subscribe for, in aggregate, 25,000 C Shares pursuant to the Issue.

Issue expenses

The Issue expenses (including VAT where relevant and assuming the Issue is fully subscribed and the Directors proceed at the target Issue size of £85 million) are expected to be approximately £1.7 million.

ISIN Numbers and TIDM

The International Security Identification Numbers ("ISIN Numbers") for the C Shares are as follows:

Open Offer	GG00BJWHXQ87
Excess Application Facility	GG00BJWHYW13
C Shares	GG00BJWVDP92

The TIDM for the C Shares will be TRGC.

Publication of the Prospectus and Circular

The Prospectus has been approved by the UK Listing Authority. A copy of the Prospectus and Circular will be available for inspection at the National Storage Mechanism which is located at www.morningstar.co.uk/uk/NSM. Copies of these documents are also available for collection, free of charge during normal business hours from the offices of Norton Rose Fulbright LLP, 3 More London Riverside, London, SE1 2AQ and at the registered office of the Company up to and including the date of Admission. The Prospectus and Circular will also shortly be available to view on the Company's website www.trig-ltd.com.

CONTACTS

InfraRed Capital Partners Limited	020 7484 1800
Richard Crawford Matt Dimond Phil George
RES	01923 299200
Jaz Bains Simon Reader
Canaccord Genuity Limited	020 7523 8000
Andrew Zychowski Lucy Lewis Robbie Robertson Dominic Waters Neil Brierley Will Barnett
Jefferies International Limited	020 7029 8000
Gary Gould Stuart Klein Alex Collins Mark James Tom Harris Peter Regan
Tulchan Communications	020 7353 4200
Martha Walsh Peter Hewer

Important Information

This document is not for release, publication or distribution (directly or indirectly) in or into the United States, Canada, Australia, Japan, the Republic of South Africa or to any "US person" as defined in Regulation S under the United States Securities Act of 1933, as amended (the "Securities Act") or into any other jurisdiction where applicable laws prohibit its release, distribution or publication. It does not constitute an offer of securities for sale anywhere in the world, including in or into the United States, Canada, Australia, Japan or the Republic of South Africa. No recipient may distribute, or make available, this document (directly or indirectly) to any other person. Recipients of this document in jurisdictions outside the UK should inform themselves about and observe any applicable legal requirements in their jurisdictions. In particular, the distribution of this document may in certain jurisdictions be restricted by law.

The C Shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and, subject to certain exceptions, may not be offered or sold within the United States or to, or for the account or benefit of, US Persons. The Company will not be registered as an "investment company" under the Investment Company Act of 1940, and investors will not be entitled to the benefits of that act. In addition, relevant clearances have not been, and will not be, obtained from the securities commission (or equivalent) of any province of Australia, Canada, Japan or the Republic of South Africa and, accordingly, unless an exemption under any relevant legislation or regulations is applicable, none of the C Shares may be offered, sold, renounced, transferred or delivered, directly or indirectly, in Australia, Canada, Japan or the Republic of South Africa.

The contents of this announcement, which has been prepared by and is the sole responsibility of the Company, have been approved by InfraRed solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000.

Each of InfraRed, Canaccord Genuity Limited ("Canaccord Genuity") and Jefferies International Limited ("Jefferies") is authorised and regulated by the UK Financial Conduct Authority. None of InfraRed, Canaccord Genuity or Jefferies is acting as adviser to any recipient of this document or will be responsible to any recipient of the document for providing the protections afforded to clients of any of them or for providing advice in connection with this document or any of the matters referred to herein. Neither Canaccord Genuity nor Jefferies has verified or authorised the contents of, or any part of, this document.

This document is an advertisement and not a prospectus and investors must only subscribe for or purchase the securities referred to in this document on the basis of information contained in the Prospectus and not in reliance on this document. This document 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 document does not constitute and may not be construed as an offer to sell, or an invitation to purchase, 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 document 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 document (including, without limitation, any illustrative modelling information contained herein), or its completeness.

None of the Company, InfraRed, RES, Canaccord Genuity or Jefferies nor any of their respective officers, partners, employees, agents, advisers or affiliates makes any express or implied representation, warranty or undertaking with respect to the information or opinions contained in this document and none of them accept any responsibility or liability (for negligence or otherwise) as to this document's accuracy or completeness or as to the suitability of any particular investment for any particular investor or for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith. In addition, no duty of care or otherwise is owed for any loss, cost or damage suffered or incurred as a result of the reliance on such information or opinions or otherwise arising in connection with this document. In all cases, each recipient should conduct its own investigations and analysis of the Company, InfraRed and RES and such recipient will be solely responsible for forming its own views as to the potential future performance of the Company.

The Company has a limited operating 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 document are targets only. There is no guarantee that any returns set out in this document 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 document.

Certain information contained in this document constitutes "forward-looking statements," which can be identified by the use of terms such as "may", "will", "should", "expect", "anticipate", "project", "estimate", "intend", "continue," "target" or "believe" (or the negatives thereof) or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or actual performance of the Company may differ materially from those reflected or contemplated in such forward-looking statements. As a result, investors should not rely on such forward-looking statements in making their investment decisions. No representation or warranty is made as to the achievement or reasonableness of and no reliance should be placed on such forward-looking statements.

 

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