REG - NextEnergy Solar Fnd - Phase II of Capital Recycling Programme

NextEnergy Solar FundAnnouncement

18/06/2024 16:30

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RNS Number : 9315S  NextEnergy Solar Fund Limited  18 June 2024

I ALEI: 213800ZPHCBDDSQH5447

18 June 2024

NextEnergy Solar Fund Limited

("NESF" or the "Company")

 

 

Phase II of Capital Recycling Programme

 

NextEnergy Solar Fund, a leading specialist investor in solar energy and
energy storage, is pleased to announce the completion of the second phase of
its Capital Recycling Programme (the "Programme") with the successful sale of
Whitecross, a 35.22MW operational solar asset.

 

Phase II of the Programme:

·    Whitecross, located in Lincolnshire, UK, is a 35.22MW utility-scale
solar asset that was developed as part of the Company's self-developed project
pipeline and energised late last year.

·     A third-party buyer, managed by Downing LLP, purchased Whitecross
through a competitive sales process.

·     The sale of Whitecross raised £27m (the "Transaction").

·    The Transaction represents a 1.3x Multiple on Invested Capital, an
attractive 14% unlevered IRR, and a 14% premium to the holding value as at 31
March 2024.

·    The Transaction is Net Asset Value ("NAV") accretive to shareholders
and will generate an estimated uplift of 0.57p which will be reflected in the
Company's NAV per share as at 30 June 2024.

·    The Investment Manager ("NEC") secured potential for further
consideration of £1m payable in the event the project benefits from planned
changes to network charging before 31 December 2028, bringing the total
transaction value to £28m.

·    The total transaction value represents a 1.3x Multiple on Invested
Capital, an attractive 15% unlevered IRR, and a 18% premium to the holding
value as at 31 March 2024.  It would also generate an estimated uplift of
0.70p if reflected in the Company's NAV per share as at 30 June 2024.

 

Use of proceeds:

·    Proceeds from the Transaction will be used to reduce the Company's
drawn short-term debt via its Revolving Credit Facilities.

 

Further updates to the Programme:

The Company has successfully sold c.96MW from its 246MW Programme to date,
equivalent to c.10% of the Company's total installed capacity. The remaining
150MW in the Programme continues to progress through a competitive sales
process to third-party buyers.  The Company will publish further updates
about Phase III of the Programme in due course.

 

 Subsidy-free solar asset  Installed Capacity  Type            Status                                 Price        NAV uplift  Premium  IRR
 Hatherden                 60MW                Ready-to-build  Sold in Phase I                        £15.2m       1.27p (1)   100%     57%
 Whitecross                35.22MW (2)         Operational     Sold in Phase II                       £27.0m (3)   0.57p (4)   14% (3)  14% (3)
 The Grange                50MW                Operational     Third-party competitive sales process  n/a          n/a         n/a      n/a
 South Lowfield            50MW                Operational     Third-party competitive sales process  n/a          n/a         n/a      n/a
 Staughton                 50MW                Operational     Third-party competitive sales process  n/a          n/a         n/a      n/a

 

 

Footnotes:

(1)  Realised in NAV as at 31 December 2023.

(2)  Originally included in the Capital Recycling Programme with a 36MW
design capacity, 35.22MW is the final installed capacity.

(3)  Excluding deferred consideration. Including deferred consideration:
Price would be £28m, Premium to holding value would be 18%, and IRR would be
15%.

(4) Estimated uplift which will be reflected in the Company's NAV as at 30
June 2024 excluding deferred consideration. Including deferred consideration,
it would generate an estimated uplift of 0.70p if reflected in the Company's
NAV per share as at 30 June 2024.

 

 

Helen Mahy, Chairwoman of NextEnergy Solar Fund Limited, commented:

"We are pleased with the completion of the Capital Recycling Programme's
second phase through the sale of Whitecross, a self-developed solar asset
which delivered attractive returns for shareholders with a 14% premium to its
holding value.

 

The Capital Recycling Programme has now successfully sold 96MW of solar assets
and the Board remains confident that this transaction alongside further
progress in the Capital Recycling Programme will continue to put NextEnergy
Solar Fund in an even stronger position to deliver long-term stable returns
and value to shareholders into the future."

 

Ross Grier, Chief Operating Officer and Head of UK Investments at NextEnergy
Capital, said:

"NextEnergy Capital have worked tirelessly over the last year to deliver two
successful phases of the Company's Capital Recycling Programme at attractive
premiums for NextEnergy Solar Fund shareholders. The attractive premium to
carrying value for both projects further reinforces our view that the share
price discount remains unjustified. The team remains focused on continuing to
drive forward the remaining phases of the Capital Recycling Programme to
further drive down short-term debt levels and return value to investors."

 

 

 For further information:

 NextEnergy Capital                          020 3746 0700

 Michael Bonte-Friedheim                     ir@nextenergysolarfund.com
 Ross Grier
 Stephen Rosser
 Peter Hamid (Investor Relations)

                                             020 7653 4000

 RBC Capital Markets
 Matthew Coakes
 Elizabeth Evans

 Kathryn Deegan

 Cavendish                                   020 7397 1909
 James King
 William Talkington

                                             020 7379 5151

 H/Advisors Maitland
 Neil Bennett
 Finlay Donaldson

                                             01481 742642

 Ocorian Administration (Guernsey) Limited
 Kevin Smith

 

 

Notes to Editors(1):

About NextEnergy Solar Fund

NextEnergy Solar Fund is a specialist solar energy and energy storage
investment company that is listed on the premium segment of the London Stock
Exchange.

 

NextEnergy Solar Fund's investment objective is to provide ordinary
shareholders with attractive risk-adjusted returns, principally in the form of
regular dividends, by investing in a diversified portfolio of utility-scale
solar energy and energy storage infrastructure assets.  The majority of
NESF's long-term cash flows are inflation-linked via UK government subsidies.

 

As at 31 March 2024, the Company had an unaudited gross asset value of
£1,155m.  More information is available at www.nextenergysolarfund.com
(https://www.nextenergysolarfund.com/)

Article 9 Fund

NextEnergy Solar Fund is classified under Article 9 of the EU Sustainable
Finance Disclosure Regulation and EU Taxonomy Regulation.  NextEnergy Solar
Fund's sustainability-related disclosures in the financial services sector are
in accordance with Regulation (EU) 2019/2088 and can be accessed on the ESG
section of both the NextEnergy Solar Fund and NextEnergy Capital websites.

 

About NextEnergy Group

NextEnergy Solar Fund is managed by NextEnergy Capital, part of the NextEnergy
Group.  NextEnergy Group was founded in 2007 to become a leading market
participant in the international solar sector.  Since its inception, it has
been active in the development, construction, and ownership of solar assets
across multiple jurisdictions.  NextEnergy Group operates via its three
business units: NextEnergy Capital (Investment Management), WiseEnergy
(Operating Asset Management), and Starlight (Asset Development).

 

·    NextEnergy Capital: has over 17 years of specialist solar expertise
having invested in over 400 individual solar plants across the world.
NextEnergy Capital currently manages four institutional funds with a total
capacity in excess of 3GW and has assets under management of $4.3bn.  More
information is available at www.nextenergycapital.com
(https://www.nextenergycapital.com/)

·    WiseEnergy®:  is a leading specialist operating asset manager in
the solar sector.  Since its founding, WiseEnergy has provided solar asset
management, monitoring and technical due diligence services to over 1,500
utility-scale solar power plants with an installed capacity in excess of
2.5GW.  More information is available at www.wise-energy.com
(https://www.wise-energy.com/)

·    Starlight: has developed over 100 utility-scale projects
internationally and continues to progress a large pipeline of c.10GW of both
green and brownfield project developments across global geographies.  More
information is available at www.starlight-energy.com
(https://www.starlight-energy.com/)

 

Notes:

(1:) All financial data is unaudited at 31 March 2024, being the latest date
in respect of which NextEnergy Solar Fund has published financial information

 

 

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