24 April 2024
US SOLAR FUND
PLC
('USF', the
'Company')
FIXED-PRICE TENDER OFFER,
INTERIM 2024 DIVIDEND POLICy AND REFINANCING
PLANS
Further to the Company's 2023 Annual
Report and previous announcements[1], the
Company is pleased to confirm its intentions in respect of a return
of capital via a fixed price tender offer, revisions to the
dividend policy and the outcome of its refinancing
analysis.
FIXED-PRICE TENDER OFFER
USF intends to undertake a
fixed-price tender offer, at a price of $0.764 per share
(equivalent to the 31 December 2023 NAV of $0.78 per share, less 2%
for the costs of administering the tender offer). Shareholders may
choose to tender for sale some or all of their shares, subject to
an upper limit of $19 million[2] being
returned to shareholders.
The terms of the proposed tender
offer will be set out in a circular to be issued in the next week,
which will be subject to a special resolution of shareholders at a
General Meeting to be scheduled for 21 May 2024, which is the same
date as the Company's Annual General Meeting.
INTERIM 2024 DIVIDEND POLICy
In light of the proposed return of
capital outlined above, and in order to improve operational cash
dividend coverage during the remainder of the year, the Board has
decided it is prudent to reduce the target dividend for 2024 to
$0.0225/share ($0.0566/share in 2023). The Board will revise the
dividend target for 2025 in light of any improvement in the
coverage as a result of successfully completing a
refinancing.
REFINANCING PLANS
As set out in USF's Annual Report
2023, operational cash dividend coverage[3]
stood at 0.50x for 2023. To improve operational cash dividend
coverage and financial returns to shareholders by reducing near
term debt amortisation, the Board has undertaken an exercise to
explore likely terms for a refinancing of the senior debt
facilities.
This exercise has now concluded, and
the Board intends to carry out a potential refinance through the
long-dated financing available in the US private debt markets. The
Company's investment manager will progress this process which would
require the Company to obtain an investment grade
rating.
Based on the indicative terms
received from potential lenders and brokers, the Board believes
that the US private debt market could provide an attractive
source of debt capital which is well-matched to the long dated,
fixed nominal contracted payments, paid by Investment Grade
Counterparties, that comprise USF's revenues.
If successful, expected outcomes of
the refinancing may include additional capital becoming available
to return to shareholders. This capital could include any
refinancing proceeds not used to repay existing facilities, the
release of the cash which currently supports a letter of credit and
any proceeds from breaking the interest rate derivatives associated
with the current debt facilities. A successful refinancing is
likely to result in an increase in operational cash dividend
coverage for 2025 and beyond.
Subject to market conditions, the
Board expects the overall process to be concluded in Q4
2024.
For
further information, please contact:
|
US
Solar Fund
Meredith Frost (Amber)
|
+44 20 7939 0550
|
|
Cavendish Capital Markets Limited
Tunga Chigovanyika
James King
Will Talkington
|
+44 20 7397 8900
|
|
KL
Communications
Charles Gorman
Charlotte Francis
Patrick Lodge
|
+44 20 3382 6644
|
About US Solar Fund plc
US Solar Fund plc, established in
2019, listed on the premium segment of the London Stock Exchange in
April 2019. The Company's investment objective is to provide
investors with attractive and sustainable dividends with an element
of capital growth by owning and operating solar power assets in
North America and other OECD countries in the Americas.
The solar power assets that the
Company acquires or constructs are expected to have an asset life
of at least 30 years and generate stable and uncorrelated cashflows
by selling electricity to creditworthy offtakers under long-term
power purchase agreements (or PPAs). The Company's portfolio
currently consists of 41 operational solar projects with a total
capacity of 443MWDC, all located in the United States.
Further information on the Company
can be found on its website at http://www.ussolarfund.co.uk.
About Amber Infrastructure Group
Amber Infrastructure (Amber) is an
international infrastructure specialist, focused on investment
origination, development, asset management and in Europe, fund
management. Amber's core business focuses on infrastructure assets
across the public, transport, energy, digital and demographic
infrastructure sectors that support the lives of people, homes and
businesses internationally.
Among other funds, Amber
Infrastructure advises International Public Partnerships, a FTSE
250-listed Company with a market cap of approximately £2.5 billion
and 15-year track record of long-term investment in infrastructure
assets globally. Amber is headquartered in London with offices in
Europe, North America and Australia and employs c.180
infrastructure professionals. Amber has had a strategic partnership
with the Hunt Group of Companies in the US since 2015. Learn more
at www.amberinfrastructure.com.
