Greencoat UK Wind PLC (LON:UKW), the leading listed renewable infrastructure fund, invested in UK wind farms, has announced a new share issuance programme to be conducted over the next 12 months through a number of tranches, with the initial placing and initial offer for subscription launching on Thursday.
Under the share issuance programme, the FTSE 250-listed company said it may issue up to a maximum of 750 million new ordinary shares over the next 12 months.
It added that the net proceeds from the initial tranche are expected to be used to repay amounts drawn under the company's debt facility agreement. The net proceeds from each subsequent tranche will be used to (i) repay amounts drawn under the facility and/or (ii) apply proceeds to make further investments.
In a statement, Shonaid Jemmett-Page, Greencoat UK Wind chairman commented: "Following our investment in the Walney offshore wind farm, and anticipating our commitment to make wind farm investments over the next 18 months, the Share Issuance Programme will enable the Company to pay down debt and continue to capitalise on our strong pipeline of acquisition opportunities in the UK wind farm market.
“Given the size and scale the Company has attained over recent years, UKW is well placed to make value- accretive acquisitions and further enhance returns for our shareholders."
On Tuesday, Greencoat UK Wind revealed it has agreed to acquire SSE's 25.1% interest in the Walney I and II offshore projects for £350mln.
Walney is located nine miles off the Cumbrian coast and has a capacity of 367Mw. Greencoat said it will fund the purchase from its £400mln acquisition facility, which will push total borrowing up to £980mln or 35% of gross asset value.
In Thursday's statement, the group said its board believes that the share issuance programme will offer significant benefits for all shareholders and the company.
It highlighted that the proceeds will enable it to reduce borrowings under the company's facility agreement; pursue further attractive investment opportunities; further diversify the company's portfolio and associated counterparties, expand the company's equity capital will further increase the trading liquidity of shares; and reduce the company's ongoing expense ratio due to the economy of scale.
The company added that as both the initial tranche and any subsequent issues will be priced above its prevailing net asset value (NAV) per ordinary share, the issuance of new shares under the programme is expected to be NAV accretive to existing shareholders.