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SDCL Energy Effcncy. (SEIT)

SDCL Energy Effcncy.

Placing and Offer for Subscription
RNS Number : 3028Q
SDCL Energy Efficiency Income Tst
18 June 2020





18 June 2020



SDCL Energy Efficiency Income Trust plc  

("SEEIT", or the "Company")  


Placing and Offer for Subscription

The Board of Directors (the "Board") announces a proposed Placing and Offer for Subscription to raise approximately £ 60 million through an issue of new Ordinary Shares in the capital of the Company at a price of 104 pence per share (the "Initial Issue").



  • Initial Issue of approximately 57,692,307 New Ordinary Shares at 104 pence per New Ordinary Share (the "Issue Price") by way of a Placing and Offer for Subscription pursuant to the Share Issuance Programme;
  • The Company has separately announced its Net Asset Value per share of 101 pence as at 31 March 2020 (30 September 2019: 99.00 pence per share)
  • The Issue Price of 104 pence represents a 3 per cent premium to the Company's 31 March 2020 Net Asset Value per share and a discount of 2 per cent to the Company's closing share price of 106 pence per share on 17 June 2020 (being the last business day prior to this Announcement)
  • Sustainable Development Capital LLP ("SDCL" or the "Investment Manager") has identified an extensive pipeline of investment opportunities with a value of over £400 million including three projects with a value of over £100 million which are at an advanced stage of negotiation  
  • The Company has a dividend target of 5.5 pence per share for the financial year to 31 March 2021, which represents a dividend yield of 5.3 per cent on the Issue Price.



The Company will be publishing a prospectus (the "Prospectus") in connection with the Initial Issue as well as a proposed Share Issuance Programme which is described in detail below.


Tony Roper, Chairman of SDCL Energy Efficiency Income Trust plc said:

"Notwithstanding the current market dislocation, energy efficiency remains of growing importance globally and SEEIT's stable cash flow profile represents a defensive investment proposition. This capital raise builds on our strong performance since IPO and allows the Company to expand its portfolio by deploying proceeds into a variety of energy efficiency projects"


Jonathan Maxwell, CEO of Sustainable Development Capital LLP, commented:

"This additional capital is intended to provide SEEIT with the ability to fund further acquisitions as we continue successfully to grow our portfolio. We have identified an extensive pipeline of diverse opportunities by technology, counterparty and geography that meet our strategy of investing in cleaner cheaper and more reliable energy, and delivering returns to our shareholders"



Background to the Issue 


SDCL Energy Efficiency Income Trust plc is the first listed company of its kind to invest exclusively in the energy efficiency sector.


Since its IPO in 2018, the Company has acquired a diversified portfolio of energy efficiency assets across the UK, Europe and North America. Most recently, on 5 February 2020, the Company announced it had completed the acquisition of a 50% interest in Primary Energy, a portfolio of recycled energy and cogeneration projects located in Indiana, USA, from a consortium led by Fortistar LLC for an equity cash consideration of approximately $110 million .


The Company's Portfolio is characterised by assets with predominantly long-term contracted cash flows which are based on availability or capacity (or a combination of both), with any offtake agreements typically structured on pre-determined terms. The vast majority of the Company's assets are operational with only 5 per cent. (by value) currently in construction.


The Company is targeting an attractive total return for shareholders of 7-8 per cent. per annum by reference to the IPO Share Price of £1.00 per Ordinary Share, with a stable and progressive dividend which is expected to equate to 5.5 pence per share in respect of the financial year to 31 March 2021, payable on a quarterly basis and representing a dividend yield of 5.3 per cent on the Issue Price. Investors in the Initial Issue will be entitled to receive the next quarterly dividend declared by the Company for the three month period of April to June 2020, which will be paid by the end of September 2020.



Use of Proceeds


The Investment Manager has identified an extensive pipeline of investment opportunities with a total value exceeding £400 million, including three projects at an advanced stage of negotiation, which in aggregate exceed £100 million in value. This pipeline meets the Company's stringent acquisition criteria and could potentially be acquired in a relatively short time frame. The Investment Manager continues to explore other investment opportunities across the market and, owing to its growing reputation in this sector, is well positioned to source new asset opportunities as they arise.

The assets available to the Company offer multiple near-term investment opportunities. The Company does not intend to acquire all of the assets in its wider pipeline following the Initial Issue and in some cases may enter into partnership agreements to acquire stakes of less than 100% in the respective asset. However, the size of the pipeline allows the Company to exercise pricing discipline when negotiating with vendors, and provides additional asset optionality, without materially compromising on the pace of investment, if acceptable terms cannot be reached with its preferred counter-parties.

Primarily, the Company intends to use the Net Initial Proceeds to deploy into its pipeline of investment opportunities. However, the Net Initial Proceeds will also provide the Company with the flexibility to advance negotiations on other opportunities identified by the Investment Manager. The Company may also elect to use a proportion of the gross proceeds to reduce the Company's leverage.


The total pipeline of investment opportunities that the Company is currently evaluating combine to form, in aggregate, a value in excess of £400 million and include three assets at an advanced stage of negotiation being:


· A pan-European rooftop solar project for an international retailer

· An electrical vehicle charging infrastructure network in the UK

· A district energy project in North America


The degree of progress for each of the opportunities in the pipeline varies and no contractually binding terms have been entered into by the Investment Manager or the Company on any of these assets. As such there can be no guarantee that the Company will be able to secure any of these pipeline assets. However, given the size of the current pipeline, the Board and the Investment Manager believe that it is now an appropriate time for the Company to issue new equity in order that it can take advantage of the investment opportunities it is currently seeing.



Benefits of the Issue


The Board believes that proceeding with the Issue will have the following benefits for SEEIT:

  • Allow the Company to invest further capital in the Company's identified pipeline opportunities which should enable it to further diversify its existing portfolio;
  • Provide the Company with immediate capital to be able to act quickly in securing attractive investment opportunities;
  • Provide the Company with the funds to repay the Acquisition Facility and RCF if appropriate, which will allow the Company to re-draw funds under the RCF as and when investment opportunities arise without incurring cash drag;
  • Create the potential to enhance the NAV per Ordinary Share of the existing Ordinary Shares through the issuance of new Ordinary Shares at a premium to NAV per Ordinary Share, after the related costs have been deducted;
  • Spread the Company's fixed running costs across a wider base of shareholders, and benefit from the reducing scale of charges for the Investment Manager, thereby reducing the total expense ratio;
  • Increase the size of the Company which should help make the Company more attractive to a wider base of investors and improve market liquidity in the Ordinary Shares; and
  • Increase the size of the Company which should help make the Company more attractive to a wider base of counterparties and improve the Company's pipeline of opportunities.



Share Issuance Programme


The Company proposes to implement a Share Issuance Programme (being a programme of issues of Shares in the form of Ordinary Shares and/or C Shares), of which the Initial Issue forms part. The Company proposes to issue up to 500 million Shares pursuant to the Share Issuance Programme, out of which, the Company intends to issue approximately 57.7 million Ordinary Shares pursuant to the Initial Issue.


The Share Issuance Programme is being effected pursuant to the authorities granted at the Company's General Meeting held on 19 November 2018.


The Share Issuance Programme is being created to provide the Company with the flexibility, should it wish, to raise further capital over the 12 months from the date of publication of the Prospectus which it may use to either repay debt or deploy into new investment opportunities in accordance with its investment policy.


The Board believe that instituting the Share Issuance Programme will:

  • Enable the Company to raise additional capital quickly through an equity issuance, in order to i) invest in opportunities identified in the future; and/or ii) repay debt;
  • Create the potential to enhance the NAV per Ordinary Share of existing Ordinary Shares through new share issuance at a premium to NAV per Ordinary Share;
  • Grow the Company, thereby spreading operating costs over a larger capital base, and benefit from the reducing scale of charges for the Investment Manager, which should reduce the total expense ratio; and
  • Partially satisfy market demand from time to time for Ordinary Shares and improve liquidity in the market for the Ordinary Shares.



Further details


Jefferies International Limited ("Jefferies") is acting as sole sponsor, global co-ordinator and bookrunner to the Company in connection with the Initial Issue and the Share Issuance Programme. Jefferies will today commence a bookbuild process in respect of the Initial Issue at the Issue Price. The Initial Issue will be non-pre-emptive pursuant to the terms set out in the Prospectus and is expected to close no later than 3:00 p.m. on Tuesday 23rd June 2020 but may be closed earlier or later at the absolute discretion of Jefferies and the Company. Details of the number of Ordinary Shares to be issued pursuant to the Initial Issue will be determined by the Board (following consultation with Jefferies and the Investment Manager) and will be announced as soon as practicable after the close of the Initial Issue.


The Initial Issue is conditional, inter alia, on the Ordinary Shares being admitted to listing on 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 (together, "Admission").


Applications will be made for the shares to be issued pursuant to the Initial Issue to be admitted to listing on the premium listing category of the Official List and to be admitted to trading on the premium segment of the Main Market. Subject to Admission becoming effective, it is expected that settlement of subscriptions by placees in respect of the Ordinary Shares and trading in the Ordinary Shares will commence at 8.00 a.m. on 26 June 2020, or such later time and/or date as may be announced by the Company after the close of the Placing.


The new Ordinary Shares issued pursuant to the Initial Issue will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of issue. The Company declared a dividend on 22 May 2020 of 2.5 pence per Ordinary Share. For the avoidance of doubt, investors who acquire Ordinary Shares in the Initial Issue will not be entitled to receive this dividend as the Company's Ordinary Shares went ex-dividend on 4 June 2020. Investors will be entitled to receive the next quarterly dividend declared by the Company relating to the period April 2020 to June 2020 which will be paid by the end of September 2020.


The target number of Ordinary Shares to be issued pursuant to the Initial Issue is 57,692,307, but the Board may increase the number of Ordinary Shares to be issued under the Initial Issue if it, in consultation with Jefferies and the Investment Manager, believes there is sufficient investor demand for those shares and suitable assets available for investment in which to deploy the Net Issue Proceeds. If the number of Ordinary Shares to be issued under the Initial Issue is increased, the maximum number of Ordinary Shares available for issuance under the remainder of the Share Issuance Programme will be reduced accordingly. The Initial Issue is not underwritten. The Placing may be scaled back in order to satisfy valid applications under the Offer for Subscription, and the Offer for Subscription may be scaled back in favour of the Placing. The Initial Issue may be scaled back by the Company for any reason, including where it is necessary to scale back allocations to ensure the Initial Issue proceeds align with the Company's post fundraise acquisition and leverage targets.


Any future issues under the Share Issuance Programme are dependent on the Company's pipeline of investment opportunities and drawings on the Company's debt facilities and accordingly there is no certainty that there will be any future issues of shares under the Share Issuance Programme before its expiry.


The Issue Price is 104 pence per New Ordinary Share. The Issue Price has been set by the Board following their assessment of market conditions and following discussions with a small number of institutional investors.


The Offer for Subscription is only being made in the UK, but subject to applicable law, the Company may allot and issue New Ordinary Shares on a private placement basis to applicants in other jurisdictions.


By choosing to participate in the Initial Issue and by making an oral and legally binding offer to subscribe for Ordinary Shares, investors will be deemed to have read and understood this Announcement and the Prospectus in their entirety and to be making such offer on the terms and subject to the conditions in this Announcement and the Prospectus, and to be providing the representations, warranties and acknowledgements contained therein.


A copy of the Prospectus, when published, will be submitted to the National Storage Mechanism and will shortly thereafter be available for inspection at: as well as on the Company's website at Full details of the Terms and Conditions of the Placing will be made available in the  Prospectus.



Expected Timetable


Initial Issue


Placing and Offer for Subscription open


18 June 2020

Latest time and date for applications under the Offer for Subscription


11:00 a.m. on 23 June 2020

Latest time and date for receipt of Placing commitments under the Placing


3:00 p.m. on 23 June 2020


The Share Issuance Programme


Publication of Share Issuance Programme Price in respect of each issuance of Ordinary Shares


On announcement of each subsequent issue pursuant to the Share Issuance Programme

Admission and crediting of CREST accounts in respect of each issuance of Ordinary Shares


8.00 a.m. on each day Ordinary Shares are issued

Last date for Ordinary Shares to be issued pursuant to the Share Issuance Programme


17 June 2021


Other key dates


Results of the Initial Issue announced


24 June 2020

Initial Admission of the Ordinary Shares to the Official List and commencement of dealings on the London Stock Exchange's main market for listed securities


8.00 a.m. on 26 June 2020


The dates and times specified above are subject to change. In particular, the Directors may (with the prior approval of Jefferies) bring forward or postpone the closing time and date for the Placing. In the event that a date or time is changed, the Company will notify persons who have applied for Ordinary Shares pursuant to the Placing or Ordinary Shares pursuant to the Share Issuance Programme of changes to the timetable either by post, by electronic mail or by the publication of a notice through a Regulatory Information Service. References to times are to London times unless otherwise stated.




Dealing codes




ISIN for the Ordinary Shares


SEDOL for the Ordinary Shares





Unless otherwise defined, capitalised terms used in this announcement (the "Announcement") shall have the same meaning as set out in the Prospectus.


For Further Information


Sustainable Development Capital LLP

Jonathan Maxwell

Eugene Kinghorn

Keith Driver


T: +44 (0) 20 7287 7700


Jefferies International Limited

Tom Yeadon

Gaudi Le Roux

Neil Winward



T: +44 (0) 20 7029 8000


TB Cardew

Ed Orlebar

Lucas Bramwell

T: +44 (0) 20 7930 0777

M: +44 (0) 7738 724 630




Legal Entity Identifier (LEI): 213800ZPSC7XUVD3NL94





This announcement is not an offer to sell or a solicitation of any offer to buy the Shares in the Company in the United States, Australia, Canada, New Zealand or the Republic of South Africa, Japan, or in any other jurisdiction where such offer or sale would be unlawful.


This communication is not for publication or distribution, directly or indirectly, in or into the United States of America. This communication is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.


The Company has not been and will not be registered under the US Investment Company Act of 1940 (the "Investment Company Act") and, as such, holders of the Shares will not be entitled to the benefits of the Investment Company Act.  No offer, sale, resale, pledge, delivery, distribution or transfer of the Shares may be made except under circumstances that will not result in the Company being required to register as an investment company under the Investment Company Act. 


This communication is only addressed to, and directed at, persons in member states of the European Economic Area (other than the United Kingdom) who are "qualified investors" within the meaning of Article 2(e) of the Prospectus Regulation ("Qualified Investors").  For the purposes of this provision, the expression "Prospectus Regulation" means Regulation (EU) 2017/1129. In addition, in the United Kingdom, this communication is being distributed only to, and is directed only at, Qualified Investors: (i) who have professional experience in matters relating to investments who fall within the definition of "investment professional" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), or (ii) who are high net worth companies, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) of the Order, and (iii) other persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as "relevant persons").  Any investment or investment activity to which this communication relates is available only to and will only be engaged in with such persons. This communication must not be acted on or relied on in any member state of the European Economic Area other than the United Kingdom, by persons who are not Qualified Investors.


The merits or suitability of any securities must be independently determined by the recipient on the basis of its own investigation and evaluation of the proposed investment trust. Any such determination should involve, among other things, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of the securities.


This announcement may not be used in making any investment decision.  This announcement does not contain sufficient information to support an investment decision and investors should ensure that they obtain all available relevant information before making any investment.  This announcement does not constitute and may not be construed as an offer to sell, or an invitation to purchase or otherwise acquire, investments of any description, nor as a recommendation regarding the possible offering or the provision of investment advice by any party. No information in this announcement should be construed as providing financial, investment or other professional advice and each prospective investor should consult its own legal, business, tax and other advisers in evaluating the investment opportunity. No reliance may be placed for any purposes whatsoever on this announcement or its completeness.


Nothing in this announcement constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient.


The information and opinions contained in this announcement are provided as at the date of the document and are subject to change and no representation or warranty, express or implied, is or will be made in relation to the accuracy or completeness of the information contained herein and no responsibility, obligation or liability or duty (whether direct or indirect, in contract, tort or otherwise) is or will be accepted by the Company, SDCL, Jefferies or any of their affiliates or by any of their respective officers, employees or agents in relation to it. No reliance may be placed for any purpose whatsoever on the information or opinions contained in this announcement or on its completeness, accuracy or fairness. The document has not been approved by any competent regulatory or supervisory authority.


The Company has a limited trading history. Potential investors should be aware that any investment in the Company is speculative, involves a high degree of risk, and could result in the loss of all or substantially all of their investment. Results can be positively or negatively affected by market conditions beyond the control of the Company or any other person. The returns set out in this document are targets only. There is no guarantee that any returns set out in this document can be achieved or can be continued if achieved, nor that the Company will make any distributions whatsoever. There may be other additional risks, uncertainties and factors that could cause the returns generated by the Company to be materially lower than the returns set out in this announcement.


The information in this announcement may include forward-looking statements, which are based on the current expectations and projections about future events and in certain cases can be identified by the use of terms such as "may", "will", "should", "expect", "anticipate", "project", "estimate", "intend", "continue", "target", "believe" (or the negatives thereon) or other variations thereon or comparable terminology. These forward-looking statements, as well as those included in any related materials, are subject to risks, uncertainties and assumptions about the Company, including, among other things, the development of its business, trends in its operating industry, and future capital expenditures and acquisitions.  In light of these risks, uncertainties and assumptions, the events in the forward-looking statements may not occur. 


Each of the Company, SDCL, Jefferies and their affiliates and their respective officers, employees and agents expressly disclaim any and all liability which may be based on this announcement and any errors therein or omissions therefrom.


No representation or warranty is given to the achievement or reasonableness of future projections, management targets, estimates, prospects or returns, if any.  Any views contained herein are based on financial, economic, market and other conditions prevailing as at the date of this announcement.  The information contained in this announcement will not be updated.


This announcement does not constitute or form part of, and should not be construed as, any offer or invitation or inducement for sale, transfer or subscription of, or any solicitation of any offer or invitation to buy or subscribe for or to underwrite, any share in the Company or to engage in investment activity (as defined by the Financial Services and Markets Act 2000) in any jurisdiction nor shall it, or any part of it, or the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision whatsoever, in any jurisdiction.  This announcement does not constitute a recommendation regarding any securities.


Prospective investors should take note that the Company's Shares may not be acquired by: (i) investors using assets of: (A) an "employee benefit plan" as defined in Section 3(3) of US Employee Retirement Income Security Act of 1974, as amended ("ERISA") that is subject to Title I of ERISA; (B) a "plan" as defined in Section 4975 of the US Internal Revenue Code of 1986, as amended (the "US Tax Code"), including an individual retirement account or other arrangement that is subject to Section 4975 of the US Tax Code; or (C) an entity which is deemed to hold the assets of any of the foregoing types of plans, accounts or arrangements that is subject to Title I of ERISA or Section 4975 of the US Tax Code; or (ii) a governmental, church, non-US or other employee benefit plan that is subject to any federal, state, local or non-US law that is substantially similar to the provisions of Title I of ERISA or Section 4975 of the US Tax Code.


Jefferies is authorised and regulated in the United Kingdom by the Financial Conduct Authority. Jefferies is acting for the Company and no one else in connection with the Placing, and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Jefferies or for affording advice in relation to any transaction or arrangement referred to in this announcement. This announcement does not constitute any form of financial opinion or recommendation on the part of Jefferies or any of its affiliates and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities.


In accordance with the Packaged Retail and Insurance-based Investment Products Regulation (EU) No 1286/2014, the Key Information Document relating to the Company is available to investors at .

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact or visit
Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.

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