Foresight Solar Fund Limited: Proposed Placing of Ordinary Shares and NAV Update 18.06.18

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX, IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, TO U.S. PERSONS, OR IN OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR INTO ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OR BREACH OF ANY APPLICABLE LAW. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT HAS BEEN DETERMINED TO CONTAIN INSIDE INFORMATION.

This announcement does not constitute an offer to sell, or the solicitation of an offer to subscribe for, or to buy shares in any jurisdiction. This announcement is an advertisement and not a prospectus. Attention is drawn to the terms and conditions at the bottom of this announcement.

Foresight Solar Fund Limited (the “Company”) Proposed Placing of Ordinary Shares and NAV Update

The Board of Foresight Solar Fund Limited announces its intention to raise a target amount of £40 million by way of a placing of new ordinary shares of no par value in the Company (“New Shares”) (the “Placing”).

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The net proceeds from the Placing will be deployed into the Company’s pipeline, or used to repay outstanding debt in order to facilitate such future deployment. In particular, the Company intends that the proceeds will ultimately be used to fund the purchase of a portfolio of 18 operational solar assets in the UK with a total installed capacity of 134.2 MW (the “Target Portfolio”) for a consideration of approximately £55.0 million (the “Acquisition”). The Target Portfolio is currently under exclusivity with the Acquisition expected to complete in July 2018. This Acquisition is part of the pipeline of value-accretive investment opportunities announced in the Company’s 2017 Audited Annual Report and Financial Statements.

Once completed, the Target Portfolio will bring the Company’s total installed capacity to 808 MW across 46 solar assets. Through the Acquisition, the Company will become the largest UK-listed dedicated solar energy investment company by installed capacity.

The Company also announces its unaudited NAV as at 18 May 2018 of £472.1 million (31 March 2018: £477.0 million), resulting in a NAV of 104.9 pence per existing Ordinary Share (31 March 2018: 106.0 pence).

The issue price of the New Shares will be 107.0 pence per New Share (the “Placing Price”). The Placing Price represents a premium to the 18 May 2018 NAV of approximately 2.0 per cent. and a discount of approximately 3.6 per cent. to the last closing share price prior to this Announcement. The Placing Price is greater than the total of the latest unaudited NAV plus the estimated costs of the Placing and therefore expected to be accretive to the NAV attributable to existing shareholders.
Stifel Nicolaus Europe Limited ("Stifel") is acting as financial adviser and sole bookrunner to the Company. The Placing will be non pre-emptive and shall commence immediately following this announcement.

The Target Portfolio

The Company has secured exclusivity over a portfolio of 18 operational solar assets in the UK with a total installed capacity of 134.2 MW. The assets have been in operation for a minimum period of two years and have received Renewable Obligation Certificate (“ROC”) accreditation ranging from 1.6 to 1.3 ROCs/MWh. The average ROC accreditation banding of the Target Portfolio is 1.41 ROCs/MWh.

The equity interest in the Target Portfolio is being acquired for a consideration of approximately £55.0 million, including the economic benefit of all cashflows from 1 April 2018. The Target Portfolio will be acquired from funds managed by Foresight Group LLP.

The Target Portfolio currently has debt facilities in place totaling £125.2 million provided by the Royal Bank of Scotland. The debt facilities have been arranged on an asset by asset basis and do not benefit from cross-collateralisation. The debt facilities expire on 30 September 2019 and it is the Company’s intention to refinance the Target Portfolio within the next 12 months.

Assuming completion of the Acquisition, the Company’s solar portfolio will represent a total of 808 MW of peak capacity across 46 projects of which 131 MW are under construction.

The Placing is not conditional on acquiring the Target Portfolio and the Company reserves the right not to proceed with the Acquisition. Accordingly, there is no minimum size required for the Placing to proceed. The maximum size of the Placing is the issue of up to 44,995,209 New Shares.

Net Asset Value Update

The Company also announces its unaudited NAV as at 18 May 2018 of £472.1 million (31 March 2018: £477.0 million), resulting in a NAV of 104.9 pence per existing Ordinary Share (31 March 2018: 106.0 pence).

The NAV has been reduced since 31 March 2018 by the payment of the final 2017 dividend of 1.58 pence per Ordinary Share, but includes accrued income for the period from 31 March 2018 until 18 May 2018. The Company's equity discount rate used to value its UK assets remains unchanged at 7.0% unlevered and 7.75% for levered assets and the methodology for calculating the NAV remains consistent with that used to calculate the 31 March 2018 NAV. The medium to long-term UK power price forecast remained unchanged against the 31 March 2018 NAV. The Gross Asset Value including Company and subsidiaries as at 18 May 2018 was £747.1 million (31 March 2018: £666.1 million).

The Company’s total outstanding debt as of 18 May 2018 was £303.5 million, including long-term debt of £208.5 million and Revolving Credit Facilities of £95.0 million.

Dividends

For the avoidance of doubt, Qualified Investors who participate in the Placing will be entitled to the dividend of 1.64 pence per Share in respect of the quarter to 31 March 2018 which was declared on 30 April 2018, to be paid on 24 August 2018, with an ex-dividend date of 9 August 2018 and a record date of 10 August 2018.

The Company remains on target to deliver an annual dividend of 6.58 pence per Share for the year ending 31 December 2018.

Further Details of the Placing

The issue of the New Shares will be undertaken under the Company's existing general authority to dis-apply pre-emption rights as approved by shareholders at the Company’s Annual General Meeting on 11 June 2018 for up to a maximum 44,995,209 New Shares, representing an aggregate amount of less than 10 per cent. of the Ordinary Shares then in issue. A prospectus is not a UK Listing Authority requirement in respect of the Placing. This announcement, together with the Prospectus forms the offer document in relation to the new Ordinary Shares in accordance with the Collective Investment Funds (Certified Funds – Prospectuses) (Jersey) Order 2012.

Application will be made for the admission of the New Shares to the premium segment of the Official List of the UK Listing Authority and to trading on the London Stock Exchange's main market for listed securities.

Participation in the Placing will only be available to persons in member states of the EEA who are qualified investors as defined in article 2.1(e) of the Prospectus Directive ("Qualified Investors").

Qualified Investors who wish to participate in the Placing should communicate their firm interest to their usual sales contact at Stifel. The decision to allot any New Shares to any Qualified Investors shall be at the discretion of the Company and Stifel. The Company reserves the right, after consultation with Stifel and the Investment Adviser, to scale back applications under the Placing at their absolute discretion in such amounts as they consider appropriate.

By choosing to participate in the Placing and by making an oral and legally binding offer to subscribe for New Shares, investors will be deemed to have read and understood this Announcement and any subsequent announcement related to the Placing (including the Terms and Conditions of the Placing in the Appendix), in its entirety and to be making such offer on the terms and subject to the conditions in this Announcement, and to be providing the representations, warranties and acknowledgements contained therein.

Expected Timetable

The timetable is subject to change at the discretion of the Company and Stifel.

Placing opens 18 June 2018
Latest time and date for receipt of Placing commitments 1pm 3 July 2018
Results of Placing announced and Trade Date 4 July 2018
Settlement and Admission of New Shares 6 July 2018

The dates and times specified above are subject to change. In particular, the Directors may (with the prior approval of Stifel) bring forward or postpone the closing time and date for the Placing. In the event that a date or time is changed, the Company will notify persons who have applied for New Shares of changes to the timetable either by electronic mail or by the publication of a notice through a Regulatory Information Service. References to times are to London times unless otherwise stated.

Other Information

Prior publications and announcements released by the Company are available on the Company’s website: http://fsfl.foresightgroup.eu/

LEI: 213800VO4O83JVSSOX33

For further information, please contact:

Foresight Group

Joanna Andrews +44 (0)20 3763 6951 (InstitutionalIR@ForesightGroup.eu)

Stifel Nicolaus Europe Limited +44 (0)20 7710 7600

Mark Bloomfield
Neil Winward
Gaudi Le Roux

Citigate Dewe Rogerson +44 (0)20 7638 9571
Louise Mason-Rutherford