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Bluefield Solar Income buys UK-based solar and wind portfolio and announces proposed issue

Bluefield Solar Income Fund - Walking on sunshine

Bluefield Solar Income buys UK-based solar and wind portfolio and announces proposed issue – Bluefield Solar Income (BSIF) has made a significant acquisition of a 93.2MWp UK-based solar and wind portfolio, expanded its revolving credit facility (RCF) and launched a placing and offer for subscription.

BSIF will raise new equity through the placing of new ordinary shares at a price of 130 pence per new ordinary share and is proposing to raise up to the Sterling equivalent of €8m pursuant to an offer for subscription.

The issue price of 130 pence represents a premium of 4.0% to the trust’s ex-dividend net asset value per share as at 31 March 2022 (adjusted to reflect the second interim dividend of 2.03 pence which will be paid to shareholders on the register as at 13 May 2022) and a discount of 5.8% to the closing share price as at 10 May 2022.

The proceeds raised will be used to pay down the company’s RCF which is now fully drawn at £200m as at 10 May 2022, and to provide additional resources to pursue the company’s investment pipeline.

Acquisition and enlarged RCF

The new solar and wind portfolio has been acquired for £112.4m and consists of fifteen solar photovoltaic plants with a total installed capacity of 64.9 MWp and four wind farms with a total installed capacity of 28.3 MWp. The assets are based across England, Wales, Northern Ireland and Scotland.

Of the solar projects, five are accredited under the feed-in-tariff regime and ten accredited under the Renewable Obligation Certificate regime with tariffs of 1.2-1.6 ROCs. All of the wind farms are accredited under the ROC regime, with tariffs of 0.9-1.0 ROCs.  In the period 2021-2035, the proportion of fixed and regulated revenues from this portfolio is projected to be approximately 57%. As at the locked box date  of the sale and purchase agreement (being 31 December 2020), the portfolio had net third party long term debt of £74.8m.

The acquisition has been initially financed using BSIF’s new and enlarged £100m revolving credit facility, provided equally by RBSi and Santander UK, which as well as being extended to May 2024 (with an option to extend to May 2025), also contains a new accordion tranche of up to a further £100m. The margin on the facility has also been lowered from 2.0% to 1.9%. Following this acquisition, BSIF is now fully drawn on this facility and total outstanding debt stands at approximately £591.9m representing 48.8% of gross asset value.

Proposed issue

Following completion of the acquisition and the transactions noted above, the company’s total outstanding debt has increased to £591.9m. Meanwhile, the adviser continues to find further solar, wind and battery storage investment opportunities with the current pipeline of future potential investment opportunities totalling £600m, including near term opportunities totalling £120m.

The board intends to use the net proceeds of the issue to reduce the amount drawn down under the RCF, as well as providing funding for construction of c. £120m of ready to build solar (108MWp) and storage (125MWp) projects and opportunities in BSIF’s wider deal pipeline.

The placing is expected to close at 12pm on Wednesday, 25 May 2022, but may close earlier or later at the absolute discretion of the company. Meanwhile, for the offer for subscription, there is a minimum subscription amount of 1,000 new ordinary shares at the issue price per applicant.

Statement from the chair:

“This, the Company’s largest portfolio acquisition to date, not only marks our third purchase of operational wind assets within twelve months, but also adds a very attractively sized portfolio of highly regulated solar assets with a substantial proportion of inflation linked revenues to the Company’s significant existing portfolio. We are delighted to announce the proposed Issue outlined in this announcement via a Placing and Offer for Subscription to pay down the Company’s fully drawn credit facility and provide Bluefield Solar with further capital to grow and diversify its portfolio. The Board and our Investment Adviser continue to carefully assess a strong pipeline of opportunities across both primary and secondary markets.”

BSIF : Bluefield Solar Income buys UK-based solar and wind portfolio and announces proposed issue

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