SDCL Energy Efficiency wants £75m – SDCL Energy Efficiency Income Trust has announced a proposed placing to raise £75m through an issue of new ordinary shares. The placing will be non pre-emptive (existing shareholders don’t get any preferential treatment). Jefferies International Limited has commenced a book-building process to determine the level of demand from potential investors for participation in the placing. To bid in the book-build, investors [professional ones] should communicate their bid (or bids) by telephone to their usual sales contact at Jefferies. Each bid should state the number of placing shares for which the prospective investor wishes to subscribe and the price or prices that the prospective investor is offering to pay. Any bid price must be for a full pence or half pence amount.
The company is in bilateral/exclusive negotiations involving approximately £100m of investments in new investment opportunities and a wider pipeline of over £250m in due diligence. The company has fully allocated and committed its current cash reserves of £135m and the majority of its revolving credit facility to nine existing committed but unfunded investments totalling about £95m and six follow-on projects of about £155m.
SDCL Energy Efficiency‘s current portfolio includes 44 different investments, diversified across several technologies, sectors and geographies. The company currently has a market capitalisation of approximately £1.1bn and continues to target a total return for shareholders of 7-8% per annum on the IPO share price of £1.00. The target dividend for the financial year ended 31 March 2022 is 5.62p. Investors in the placing will be entitled to receive the next quarterly dividend.
Portfolio update
As at 30 September 2021, the company had a NAV of c.£950m, diversified across technology, geography and credit counterparty. The NAV at 30 September 2021 was 104.5p. The portfolio as a whole continues to perform as expected since the 30 September 2021 interim report. Pro forma gearing is currently at 40%.
In September 2021, the company raised £250m and since then has spent about £125m on:
- the remaining 35% equity interest that it did not already own in Primary Energy for a consideration of $92 million, approximately half of which was funded by third party debt;
- a £3 million investment commitment to implement, finance and own the replacement of an energy efficient chiller system at The LYCRA Company’s Singapore facility;
- a c.$5 million debt investment alongside other investment partners to fund the energy efficiency measures in the 303 Battery Street building in Seattle, US;
- $21 million in an operational portfolio of LED lighting projects across 42 states in the United States, together with a 50% interest in Future Energy Solutions Lighting Holdings LLLP;
- €12 million to acquire remaining equity interests that it did not already own in three investments within the Oliva Spanish Cogeneration;
- a c.£28 million incremental deployment into existing investments, Onyx, Biotown and Spark US Energy Efficiency II; and
- an 80% equity interest in a high-efficiency and operational biomass cogeneration plant, Sociedade de Iniciativa e Aproveitamentos Florestais – Energies, S.A., in Mangualde, Portugal for €22 million.
Including unfunded investments of approximately £95 million and six follow-on projects with a value of approximately £155 million, the company has committed all the proceeds of its September 2021 equity raise.
Approximately 50% of the portfolio, by value, has revenues that are partly or wholly correlated with inflation.
SEIT : SDCL Energy Efficiency wants £75m