LONDON, UK: Foresight Sustainable Forestry Company, an externally managed investment company that will invest in UK forestry and afforestation assets, announced the launch of its initial public offering (IPO) on the Premium Segment of the Official List and the Main Market of the London Stock Exchange.
Foresight Sustainable Forestry Company plans a target issue of up to 200 million ordinary shares at an initial issue price of 100 pence per ordinary share. This announcement follows the Company’s intention to float announcement dated 6 September 2021.
The initial placing, offer for subscription and intermediaries offer opened Thursday and are expected to close on 18 November 2021.
Richard Davidson, prospective Chairman of Foresight Sustainable Forestry Company PLC, said: “While UK forestry investment has previously seen high barriers to entry, we are delighted that Foresight Sustainable Forestry Company Plc is uniquely offering liquid access to UK forestry and afforestation assets to both institutional and retail investors.
As well as the attractive dynamics of the timber market, investors will also benefit from significantly increasing demand for carbon credits and from forestry grant schemes and new UK government support for afforestation. The government is targeting 30,000 hectares of UK afforestation each year until 2050 and if the Company achieves its target issue size, it expects to have initiated around 10,000 hectares of afforestation development within the next year.
It is our IPO investors who will provide the enabling capital to make this happen, who will help unlock this positive change and make a true sustainability, biodiversity and ESG impact. We look forward to welcoming them in due course.”
Bernard Fairman, Executive Chairman and Co-Founder of Foresight Group, said: “As calls for action on climate change become louder each day and corporate net zero pledges continue to rise, forestry provides a unique investment opportunity as a truly sustainable asset class with exceptional ESG and sustainability credentials.
Until now, there has been no listed UK-focused forestry investment company available to investors. The opportunity to invest in UK forestry strategies has only been open to investors who were willing to lock into relatively illiquid private structures, often with high minimum investment thresholds, or to acquire forest properties directly themselves.
By launching Foresight Sustainable Forestry Company Plc, we are seeking to provide a unique offering which, as well as delivering attractive returns, has the potential to drive progressive sustainability results in the UK forestry industry over the coming years.”
The Investment Opportunity
Investors and companies are currently facing an inflection point, with calls for action on climate change becoming more urgent by the day, sustainability and ESG considerations further gaining in importance, and the risk of inflation increasing through deglobalisation, supply chain bottlenecks, and monetary response to COVID-19. In addition, 2020 saw the highest correlation across asset classes and geographies in two decade, introducing higher volatility into investment portfolios.
Foresight Group believes forestry provides a unique investment opportunity, meeting investor requirements on climate, sustainability and ESG issues, inflation protection properties, and portfolio diversification.
Forestry is a real asset and a natural and growing store of value, independent of the economic cycle. The Company is targeting returns of more than CPI + 5 per cent per annum on a rolling five-year basis, based on the Net Asset Value once substantially invested.
It is intended that the returns will be created by the capital appreciation of the underlying asset freeholds (timber asset value increases as well as value creation as Afforestation assets successfully pass through project development milestones) and cash yield, which is generated by the sale of timber from the harvesting of mature forest compartments, the value of Carbon Credits, and, on a more ancillary basis, opportunistic leases to renewable energy developers and ecotourism.
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