Downing Renewables & Infrastructure targets £50m equity raise and investment policy change
Aims to increase short-term debt
Downing Renewables & Infrastructure trust (DORE) has launched a £50m fundraise in order to pay off outstanding credit and fund an investment pipeline, while also seeking approval to alter its investment policy.
The company is proposing to initially issue over 45m ordinary shares at an issue price of 111p and will then establish a share issuance programme in which it will issue 250m ordinary shares over a period of 12 months.
After the outstanding £17.3m drawn down under its revolving credit facility has been paid, any further proceeds from the initial raise will be used to purchase assets in its investment pipeline such as hydropower, wind and solar assets in the UK, Sweden and Finland.
Hugh Little, chair of DORE, said: “The company has made excellent progress since its IPO in building a diverse portfolio of renewables projects in the UK and Northern Europe. The investment manager has already demonstrated its ability to deliver value for shareholders ahead of expectations through a series of carefully selected and highly-accretive acquisitions.”
He added: “The company’s pipeline, which has in excess of £200m of near-term opportunities, includes hydro, solar, wind, batteries and utilities across target geographies and construction phases.
“Raising capital to acquire additional assets has the potential to further grow NAV, increase the diversity of DORE’s portfolio, and continue to provide stable returns to shareholders.”
The initial issue is conditional on the passing of relevant shareholder resolutions at DORE’s annual general meeting, which is expected to be held on the 23 June 2022.
DORE is also proposing changes to its investment policy to allow greater short-term borrowing so the company can expand the size and scale of its operations by investing in those assets with attractive risk-adjusted returns more efficiently.
These changes include increasing the technology limit from 50% to 60% as well as increasing the geographic investment limit from 60% to 75% of gross asset value until the company’s net asset value exceeds £300m.
It is also proposing to amend the definition of gross asset value so that the assumption that gearing of 50% is only in place for uninvested cash and cash equivalents, but otherwise to use actual gearing levels when determining gross asset value.
Finally, it is also proposing to increase its maximum short-term debt limit from 10% to 20% of gross asset value.
These changes have already been approved by the FCA and require shareholder approval at the AGM.
Source: investmentweek.co.uk
