Greencoat Renewables looking for more money to fund attractive near-term opportunities – Greencoat Renewables (GRP) has announced a proposed placing by way of a non-pre-emptive issue at a Placing Price of €1.12, under its existing 400 million share issuance programme launched on 4 October 2021.
The placing price represents a discount of 6.7% to the closing price per ordinary share of €1.20 on Euronext Dublin on 18 March 2022 and represents a premium of 6.6% to the last reported NAV of 105.1 cent per ordinary share as at 31 December 2021.
GRP has multiple attractive near-term investment opportunities under consideration in Ireland and continental European markets, with c.380MW currently under exclusivity across a mix of operating and forward sale opportunities located in Sweden, France, Spain, and a new Northern Europe market.
Proceeds from the placing will provide GRP with the flexibility to execute on assets under exclusivity and meet obligations under committed forward sale investments, all while maintaining gearing (currently 43%) within the trust’s target range of 40-60%.
Ronan Murphy, Non-Executive Chairman of Greencoat Renewables, said: “We are pleased to announce a second equity issuance under our existing Share Issuance Programme launched in October 2021, reflecting the strength of our pipeline and continued confidence in our ability to deliver value-accretive growth for shareholders.
“The growth and strategic diversification we have achieved in the business reflects our market-leading position in the Irish market and our strong relationships and expanding footprint across continental Europe. Since the launch of the current Share Issuance Programme, we have acquired our first asset in Sweden and agreed our first forward-sale transaction in Spain.”
Irish and European Market Background
Ireland remains an attractive location for investment in wind assets, with a reliable wind resource and robust regulatory regime, underpinned by REFIT 2 and its replacement, RESS, which held its first auction in 2020. The estimated renewable capacity for onshore wind in Ireland is expected to increase from 4.5GW in 2020 to 8.2GW in 2030.
The company has invested around €360m in Irish assets during 2021 and early 2022, increasing its Irish portfolio size by 33% (including forward sales) since 31 December 2020. Greencoat Renewables is the largest asset owner, with 16% market share, of Irish operating wind assets.
GRP continues to see strong investment opportunities across continental Europe through strong relationships with asset owners, developers and advisors with a target market of c.250GW across the Relevant Countries. The company has continued its geographic diversification, having now entered five European countries, demonstrating the Company’s ability to scale into Europe.
The company executed transactions in Sweden, Finland and Spain in 2021 with the acquisition of Erstark South in Sweden in Q4 2021 and two forward sale commitments to acquire Kokkoneva in Finland (completion expected in Q2 2022) and Torrubia in Spain (completion expected in Q4 2022).
Power Prices and NAV
GRP has seen wind generation broadly on budget for the Q1 period to date. In addition, the company has continued to see captured power prices in Ireland above the current REFIT pricing. GRP expects the impact of these higher captured power prices so far in Q1 2022 could contribute, as a standalone assumption, to a Q1 2022 NAV increase of 2c to 3c. However, captured power prices remains one of several assumptions, including forward power prices and inflation expectations, that feed into the Q1 2022 NAV.
As a result, the final outcome on the Q1 2022 NAV would be dependent on a range of those other assumptions, that will be updated when the Q1 2022 NAV will be released to market on 29 April 2022.
Use of proceeds
Proceeds from the placing are expected to be used to partly pay down the Revolving Credit Facility, which is currently drawn by €75.7m, provide the company with the flexibility to execute on assets under exclusivity and to meet its obligations under committed forward sale investments, all while maintaining gearing (currently 43%) within the company’s target range of 40-60%.
Details of the placing
The placing is being conducted, subject to the satisfaction of certain conditions through a non-pre-emptive institutional placing.
The company will apply to Euronext Dublin and to the London Stock Exchange for the shares to be admitted to trading on Euronext Growth and AIM respectively. It is expected that settlement will occur, admission will become effective and that dealings will commence at 8am on 5 April 2022.
GRP : Greencoat Renewables looking for more money to fund attractive near-term opportunities