Aquila Energy Efficiency Trust announced its intention to launch an IPO and admit its shares on to the premium segment of the main market of the London Stock Exchange. The company is seeking to raise up to £150m through a placing.
In addition, pursuant to the prospectus expected to be published shortly [we will publish this on the website as soon as it’s released], a placing programme will allow the company to issue further shares and/or C shares in the 12 months from the date of publication of the prospectus and following admission.
‘Investments will seek to reduce primary energy consumption, CO2 emissions and target other benefits including improved air quality’
• The company will seek to generate attractive returns for shareholders, principally in the form of income distributions by investing in a diversified portfolio of energy efficiency investments.
• The company‘s investments seek to reduce primary energy consumption, reduce CO2 emissions and in many cases deliver economic savings and other benefits to the counterparties including improved air quality. The company will not invest in fossil fuel extraction or mineral extraction projects.
• The company is targeting a dividend of a minimum of 3.5 pence per ordinary share in relation to the financial year ending 31 December 2022; and a minimum of 5 pence per ordinary share in relation to the financial year ending 31 December 2023, with the aim of increasing this dividend progressively over the medium term.
• The company is targeting a total shareholder return of 7.5% to 9.5% per annum (net of fees and expenses) in the medium term (by reference to the issue price) following full investment of the net issue proceeds to be achieved over the long term through the reinvestment of excess cash flows, asset management initiatives and the use of portfolio leverage.
• The company is differentiated by its ability to invest in diversified assets within the energy efficiency sector including, but not limited to, energy efficient lighting, smart building and metering services, cogeneration plants, heating, ventilation and air conditioning (HVAC) systems, efficient boilers, solar photo voltaic plants batteries, other energy storage solutions, electric vehicles and associated charging infrastructure. In addition, the company may also invest into majority or minority interests in other companies with a strategy that aligns with the Company’s investment objective, such as developers, operators or managers of energy efficiency investments.
• The company will contract with a diverse range of private and public sector counterparties, including small and medium-sized enterprises, industrials and municipalities.
• The company will invest throughout the EEA, Switzerland and the United Kingdom. This geographical diversification is expected to reduce the exposure of the company to any particular market.
• The company will focus on investments with values of up to €10m, although larger investments may be made where available.
• The company will aim to generate stable income and cash-flows from its energy efficiency investments typically through asset backed contracts with a duration of between 5 and 15 years.
• The AIFM has appointed Aquila Capital as the investment adviser to the AIFM in respect of the company. The Aquila Group was founded in 2001 and has more than 19 years’ experience in alternative investment solutions. It is independently owned and operated with approximately €12.5 billion of assets under management or administration and more than 450 employees located in fourteen offices across Europe and Asia as at 31 December 2020.
• The Investment Adviser has identified an Advanced Pipeline of approximately €210m (approximately £180m) of energy efficiency assets for potential acquisition by the company, including certain assets held in Aquila Managed Funds as at the date of the prospectus.
• In addition to the assets constituting the Advanced Pipeline, the Investment Adviser has identified certain opportunities with a total value of around €300 million that may become available for investment after the first anniversary of Admission, which would meet the company’s Investment Policy and therefore potentially be suitable for acquisition by the company, should they become available.
• The company is expected to qualify for London Stock Exchange’s Green Economy Mark at Admission, which recognises companies that derive 50 per cent. or more of their total annual revenue from products and services that contribute to the global green economy. The underlying methodology incorporates the Green Revenues data model developed by FTSE Russell, which helps investors understand the global industrial transition to a green and low carbon economy with consistent, transparent data and indexes.
Peel Hunt is acting as sole sponsor, placing agent and intermediaries offer adviser to the company and, with effect from admission, will act as the company’s corporate broker.
Commenting on the launch, chair of Aquila Energy Efficiency Trust, Miriam Greenwood, said: “The company will allow investors to access a leading European investment manager with considerable experience in the sector and a diverse pipeline focused on proven technologies across the European Economic Area, the UK, and Switzerland. The company is intended to assist corporates in stepping forward to play their part in addressing the major challenges facing the planet from climate change, supporting important and ambitious national targets across the region to reduce CO2 emissions.”