TIDMFSF
RNS Number : 3370U
Foresight Sustain. Forestry Co PLC
01 August 2022
Monday 01 August, 2022
Foresight Sustainable Forestry Company Plc
("FSF" or "the Company")
FSF acquires three afforestation sites in Scotland and signs
GBP30 million Revolving Credit Facility
Foresight Sustainable Forestry Company Plc, an investment
company that invests in UK forestry and afforestation assets, today
announces the acquisition of a further three afforestation sites in
Scotland (deploying GBP3.8m, inclusive of tax and other transaction
costs) and the signing of a GBP30m Revolving Credit Facility
agreement.
Acquisitions
On 15 July 2022, FSF completed the acquisition of Droveroad
Wood, a c.50 hectare afforestation property located in Lilliesleaf
in the Scottish Borders, for GBP0.9m (including tax and other
transaction costs). The property contains a mix of existing forest
and woodland and land well suited for the establishment of a
productive woodland creation scheme.
On 18 July 2022, FSF completed the acquisition of Chatto Craigs,
a c.98 hectare afforestation property located near Galashiels in
the Scottish Borders, for GBP1.8 million in aggregate (inclusive of
tax and other transaction costs). A high proportion of the property
is expected to be suitable for a high yielding woodland creation
scheme.
Droveroad Wood and Chatto Craigs are both well located in
relation to sawmills and timber processors and expand FSF's growing
Scottish Borders portfolio.
On 29 July 2022, FSF completed the acquisition of Piltanton
Wood, a c.79 hectare afforestation property located in Dumfries
& Galloway, Scotland, for GBP1.1 million in aggregate
(inclusive of tax and other transaction costs). The property has a
small proportion of existing forestry, including native
broadleaves, and a high proportion of the land area is expected to
be suitable for inclusion in a woodland creation scheme. The
acquisition extends the Company's presence in the region.
Combined, the three transactions increase the total area of
FSF's portfolio to 8,769 hectares and the percentage (by value) of
afforestation sites in the portfolio to 38%, representing continued
progress towards the Company's aim of having 40-50% of its
portfolio by value allocated to afforestation. The Company is
looking to further increase its number of afforestation properties
in the near future and is on track to deliver on this core
strategic objective.
Revolving Credit Facility
FSF is also pleased to announce that it has signed a new three
year agreement providing a committed Revolving Credit Facility
("RCF") of GBP30 million and an uncommitted accordion facility of
up to an additional GBP30 million. The RCF has a 3-year tenor and
two 1-year extension options. The accordion feature allows the
Company to bring debt in line with 30% of Gross Asset Value, as
detailed in FSF's Prospectus.
The RCF gives FSF a committed source of flexible funding outside
equity raisings. Once drawn, the facility is expected to be paid
down periodically by the proceeds of equity issues. This enables
FSF to make new investments with certainty of funding and on a
timely basis, reducing performance drag associated with holding
cash balances.
The interest margin chargeable on the RCF is linked to the
Company's Sustainability and ESG ("S & ESG") performance, with
FSF incurring a premium or discount to its margin based on its
performance against defined targets. These S & ESG targets
are:
- A year-on-year increase in the total number of hectares of
land acquired for carbon sequestering activities (including
afforestation, peatland restoration and voluntary carbon credit
acquisition)
- A year-on-year increase in the total number of people
completing FSF's Forestry Skills Training Programme
Performance against these targets will be measured annually,
with the interest cost of the RCF being amended accordingly in the
following year.
The lender is Virgin Money and the interest margin can vary
between 200bps and 220bps over SONIA ('Sterling Overnight Index
Average'), depending on performance against the Company's S &
ESG targets.
Richard Kelly and Rob Guest, Co-Heads of Foresight Sustainable
Forestry Company, commented:
"We are delighted to have completed this trio of afforestation
acquisitions which commences the deployment of the proceeds from
our recent fundraise. These investments move us closer to achieving
our objective of having 40-50% of the value of the portfolio
allocated to afforestation and our attractive imminent pipeline
makes us confident of achieving that goal".
Richard Davidson, Chairman of Foresight Sustainable Forestry
Company, also commented
"Reaching financial close on the RCF is an important part of the
business plan documented in FSF's IPO Prospectus. The RCF provides
access to flexible capital which will be used to grow the business
through the delivery of our deal pipeline. The Company is very
pleased to be working with Virgin Money and are proud that the
interest margin is aligned to S & ESG targets which form a core
part of FSF's investment strategy".
About the Company
Foresight Sustainable Forestry Company Plc ("the Company") is an
externally managed investment company investing in a diversified
portfolio of UK forestry and afforestation assets. Targeting a net
total return of more than CPI +5%, the Company provides investors
with the opportunity for real returns and capital appreciation
driven by the prevailing global imbalance between supply and demand
for timber; the inflation-protection qualities of UK land
freeholds; and biological tree growth of 3% to 4% not correlated to
financial markets. It also offers outstanding sustainability and
ESG attributes and access to carbon units related to carbon
sequestration from new afforestation planting. The Company targets
value creation as the afforestation projects successfully achieve
development milestones in the process of converting open ground
into established commercial forest and woodland areas. The Company
is seeking to make a direct contribution in the fight against
climate change through forestry and afforestation carbon
sequestration initiatives and to preserve and proactively enhance
natural capital and biodiversity across its portfolio. It is
managed by Foresight Group LLP. https://fsfc.foresightgroup.eu/
For further information, please contact:
Foresight Sustainable Forestry Company Plc
Robert Guest
Richard Kelly
fsfc@foresightgroup.eu +44 20 3667 8100
Jefferies International Limited
Neil Winward
Will Soutar +44 20 7029 8000
Citigate Dewe Rogerson
Toby Moore ( toby.moore@citigatedewerogerson.com
)
Jos Bieneman ( jos.bieneman@citigatedewerogerson.com
) +44 7768 981763
This announcement does not constitute, and may not be construed
as, an offer to sell or an invitation to purchase investments of
any description, or the provision of investment advice by any
party. No information set out in this announcement is intended to
form the basis of any contract of sale, investment decision or any
decision to purchase securities in the Company.
This announcement may include statements that are, or may be
deemed to be, "forward-looking statements". These forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "believes", "estimates",
"anticipates", "expects", "intends", "may", "will", "targeting" or
"should" or, in each case, their negative or other variations or
comparable terminology. All statements other than statements of
historical facts included in this announcement, including, without
limitation, those regarding the Company's financial position,
strategy, plans, proposed acquisitions and objectives, are
forward-looking statements.
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