Irish energy group Greencoat Renewables has announced a sale of up to 250 million new shares as it seeks to provide the company with "greater financial capacity" to take advantage of an "increasingly active" secondary market for wind assets in the Republic.
The company, which raised €270 million when it listed in July 2017 in an oversubscribed (initial public offering) IPO, intends to issue about 100 million placing shares at a price of €1.01 per placing in the first tranche on Monday.
It currently has 270 million shares in issue. Adjusting for the 1.5 cent dividend announced last week, the new stock is being issued at a 2.4 per cent discount to the most recent closing price.
The net proceeds of the initial placing will be used to refinance the company’s revolving credit facility, allowing it to make acquisitions while maintaining total gearing (currently 43 per cent) within the target range of 20 to 60 per cent.
Davy analyst Michael Mitchell said the company was currently actively looking at a pipeline of more than 200MW in energy projects. That is more than double the capacity of the company’s existing assets under management.
The board believes the share sale will provide the company with the “financial flexibility” to raise further equity as investment opportunities arise and enable the company to deliver on its stated strategy.
Group chairman Rónán Murphy said he intended to participate in the initial placing by subscribing for about €25,000 worth of new shares.
Another director, Emer Gilvarry, said she intended to subscribe for about €50,000 worth of new shares.
Opportunities
Mr Murphy said there was an “increasing number” of opportunities in the sector. “We are very pleased with the progress made over the past 12 months, achieving the operational and strategic targets we laid out at IPO,” he said.
“The secondary market for operating wind assets in Ireland continues to grow apace, with an increasing number of opportunities large and small. We believe Greencoat Renewables is uniquely well positioned to take advantage of this market opportunity.”
The company said that while it expected to continue expanding its portfolio, shareholder returns “remain paramount” and it would maintain a “disciplined approach” to acquisitions.
It added that it would ensure it continued to deliver a progressive dividend policy and an attractive overall return.
Shareholders will vote on the share plan at an EGM to be held on August 1st.
