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US Solar Fund raises US$132m in first fundraise since IPO

US Solar Fund

US Solar Fund (USF) has announced that it has raised US$132m in its first fundraising since its IPO two-years ago (click here to read the IPO note we produced on the fund at that time). This first issue, which was conducted under its recently launched placing programme, was well supported by new and existing investors and was oversubscribed. This has allowed USF’s board to expand the size of the issue from the US$105m of gross proceeds announced on the 13 April 2021, to US$132m. Notwithstanding the increased size of this initial Issue, applications for new shares in USF still exceeded the total number of shares to be issued and so a scaling back exercise has been undertaken.

How will the additional proceeds be deployed?

USF’s board has said that it has consulted with the fund’s investment manager and has agreed that it would allocate:

  • an additional c.$7.5 million to the Heelstone refinancing;
  • use a further c.$8 million to repay existing drawings under the Company’s revolving credit facility; and
  • retain the balance for working capital and subsequent investments.

How are the new shares being issued?

A total of 132m new ordinary shares are to be issued at US$1.00 per share, with a Sterling equivalent issue price fixed at 72.0617 pence per new share (based on a USD/GBP exchange rate of 1.38770). Of the 132m new shares:

  • 122,392,978 will be issued pursuant to the Placing;
  • 3,299,868 will be issued pursuant to the Offer for Subscription; and
  • 6,307,154 issued under the Intermediaries Offer.

Comments from Gill Nott, Chair of US Solar Fund

“We’re delighted with this strong backing from individual and institutional investors for our first fundraise following US Solar Fund’s IPO two years ago.  We will put these funds to work immediately, reducing our Heelstone Portfolio financing costs along with the fund’s total gearing, and deploying into our pipeline of attractive investment opportunities. Among other benefits, these transactions will increase dividend cover and be accretive to NAV.

“With President Biden recently announcing yet more ambitious carbon reduction targets, and extending Federal subsidy support, we believe the opportunity and need to invest in utility scale solar remain compelling and urgent.  We would like to thank our new and existing investors for their support and look forward to updating them on further progress shortly.”

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