NUMIS: SDCL Energy Efficiency Income – Seeking to raise £80m to fund pipeline acquisitions

General/ 13 October 2020
  • Placing: SDCL Energy Efficiency Income is seeking to raise £80m through the issue of 76.2m new ordinary shares at 105.0p. The issue price represents a 5.4% discount to last night’s closing price of 111p and an 8.1% premium to the 31 March NAV, after adjusting for two interim dividends totalling 3.8p paid since March. The proceeds will be used to fund further acquisitions from the manager’s pipeline of investment opportunities, of which more than £100m of opportunities are under exclusivity and a further £150m is at advanced stages of due diligence. The manager expects 30 September asset valuations to be similar to those at 31 March, given the portfolio has performed in line with expectations since March. New shares form the placing will be entitled to receive the third quarter dividend which is expected to be declared in November.
  • Background: SDCL Energy Efficiency Income last raised capital in June with a £110m placing that was upscaled from an initial target of £60m to meet investor demand. Since this point the company has committed £50m to electric vehicle charging infrastructure in the UK, in addition to acquiring a portfolio of CHP projects for an initial £5m and an energy efficiency project in Singapore for £2m. The fund has grown through a series of placings since it launched with IPO proceeds of £100m in December 2018. As a result, it now has a market cap of £473m. Energy efficiency and storage remains an in vogue sector with investors, particularly those with a sustainability focus. We note that Triple Point recently announced its intention to raise £200m for the IPO of a new investment company, Triple Point Energy Efficiency Infrastructure, which will invest in a diversified portfolio of energy efficiency assets in the UK that have a positive environmental impact and facilitate the transition to a low carbon economy.