Blackfinch Renewable evaluates £300mn IPO on London Stock Exchange

LONDON, UK: Blackfinch Renewable European Income Trust plc (BRET), a new closed-end investment trust established to invest in a diversified portfolio of mixed renewable energy infrastructure assets in Europe, announced its intention to launch an initial public offering (IPO) on London Stock Exchange to raise up to £300 million by way of a placing, offer for subscription and intermediaries offer of Ordinary Shares.

BRET also seeks admission of its Ordinary Shares to the premium listing segment of the Official List of the FCA and to trading on the main market for listed securities of the London Stock Exchange.

In addition to the IPO on London Stock Exchange, pursuant to the Prospectus, a placing programme will allow the Company to issue further Ordinary Shares in the 12 months from the date of publication of the Prospectus and following Admission.

Blackfinch Group, the award-winning investment specialist with significant experience of investment in the renewable energy sector and a heritage dating back over 25 years, will be appointed as the Company’s Investment Manager.

BRET’s investment aims are to provide shareholders with an attractive level of distributions by investing in a diversified portfolio of mixed renewable energy infrastructure assets in Europe that have the opportunity for capital appreciation over the medium-to-long term through active asset management.

Once fully invested, the Company is targeting a dividend yield, based on the Initial Issue Price, of 1.0% to 3.0% for the first financial year to 30 June 20221, 5.0% to 5.5% for the second financial year to 30 June 20231 (together, the “Initial Target Dividend”) and thereafter 6.0% per annum, increasing progressively (the “Target Dividend”). Dividends are expected to be paid quarterly and generally in equal instalments. The Company will target a net total shareholder return in excess of 8.0% per annum over the medium-to-long term (the “Target Net Total Return”).

BRET is expected to qualify for the London Stock Exchange’s Green Economy Mark at Admission, which recognises companies that derive 50% or more of their total annual revenues from products and services that contribute to the global green economy.

The underlying methodology incorporates the Green Revenues data model developed by FTSE Russell, which helps investors understand the global industrial transition to a green and low carbon economy with consistent, transparent data and indexes.

BRET has engaged Howard Kennedy Corporate Services LLP as sponsor and Barclays Bank PLC, acting through its investment bank, as Sole Global Coordinator and Joint Bookrunner with finnCap Ltd.

Blackfinch Investments Limited will be appointed as the Company’s alternative investment fund manager (AIFM) for the purposes of the UK AIFM Laws.

Anthony Marsh, Chairman of Blackfinch Renewable European Income Trust, commenting on the proposed IPO, said: “We are delighted to announce that we are considering an IPO and a fundraising of up to £300 million, which we intend to make available to retail investors via an intermediaries offer.

“Demand for renewable energy in Europe is enormous, and there is a critical undersupply. This new investment trust will create a portfolio of European renewable energy infrastructure assets capable of generating stable long-term cash flows that will support a dividend yield over the medium-to-long term of 6% per annum and more, and total shareholder returns of over 8% per annum.

“The portfolio will be diversified across technology, geography, and stage of construction, and investments will be focused on the higher yielding markets of Italy, Portugal and Central Eastern Europe, including Poland, Czech Republic, Austria and Hungary.

“Blackfinch Group, BRET’s Investment Manager, has a highly experienced energy investment team and successful track record in renewable energy investments, and their network of strategic partners will help accelerate the deployment of monies raised.

“We are also delighted that BRET is expected to qualify for the London Stock Exchange’s Green Economy Mark at Admission, its badge of ‘green excellence’, and look forward to the Company’s flotation on the Main Market of the London Stock Exchange in October.”

Richard Cook, Chief Executive Officer of Blackfinch Group, said: “Reaching net zero emissions by 2050 is the goal of major economies globally. The conversion to cleaner forms of energy is being accelerated in Europe, which has ambitious carbon reduction targets. However, there is an overwhelming deficit of supply of the cleaner forms of energy that are needed to meet these targets.

“Blackfinch has a well-established track record of investment in the renewable energy sector. We look forward to using our experience and expertise in our role as Investment Manager and Asset Manager to generate the attractive dividend returns and capital growth that BRET is targeting – a yield of 1.0% – 3.0% in the first year, rising to 5.0% – 5.5% in the second year from admission, and 6% thereafter, together with a net total return in excess of 8.0% a year over the medium-to-long term”.