REX Retail Offer
19 November 2021
NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, BY ANY MEANS OR MEDIA IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, NEW ZEALAND, JAPAN, THE REPUBLIC OF SOUTH AFRICA, ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA (THE "EEA") OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT IS FOR INFORMATIONAL PURPOSES ONLY, AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF AN OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY SECURITIES OF OCTOPUS RENEWABLES INFRASTRUCTURE TRUST PLC.
THE CONTENTS OF THIS ANNOUNCEMENT, WHICH HAVE BEEN PREPARED BY AND ARE THE SOLE RESPONSIBILITY OF OCTOPUS RENEWABLES INFRASTRUCTURE TRUST PLC, HAVE BEEN APPROVED BY OCTOPUS RENEWABLES LIMITED (THE "INVESTMENT MANAGER") AS A FINANCIAL PROMOTION SOLELY FOR THE PURPOSES OF SECTION 21(2)(B) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 ("FSMA").
Octopus Renewables Infrastructure Trust plc
("ORIT" or the "Company")
REX Retail Offer
Octopus Renewables Infrastructure Trust plc is pleased to announce a conditional offer for subscription via REX (the "REX Retail Offer") of new ordinary shares of 1 pence each in the Company ("REX Retail Offer Shares") at an issue price of 105.5 pence per REX Retail Offer Share (the "Issue Price"). The Issue Price represents a discount of 4.1% to the closing mid-price on 18 November 2021 and a premium of 6.4% to the unaudited net asset value per Ordinary Share of 99.16 pence as at 30 September 2021, as announced on 2 November 2021. The Company is also conducting a placing of new Ordinary Shares at the Issue Price (the "Placing") as announced earlier today.
The REX Retail Offer and the Placing are conditional on the new Ordinary Shares to be issued pursuant to the REX Retail Offer and the Placing being admitted to listing on the premium listing segment of the Official List of the Financial Conduct Authority and to trading on the premium segment of the Main Market of the London Stock Exchange respectively ("Admission"). Admission is expected to take place at 8.00 a.m. on 7 December 2021. Completion of the REX Retail Offer is conditional, inter alia, upon the completion of the Placing.
Octopus Renewables Limited (the "Investment Manager") has identified a number of Renewable Energy Assets with an aggregate value of approximately £1.5 billion which the Investment Manager considers would meet the Company's investment policy and therefore would potentially be suitable for acquisition by the Company ("Pipeline Assets"). The Pipeline Assets are located in the UK, Germany, France, the Netherlands, Spain, Sweden and Finland.
The Investment Manager has undertaken preliminary due diligence in relation to the Pipeline Assets and has made non-binding offers in relation to the Pipeline Assets which are not held in Octopus Managed Funds. Pipeline Assets with a value of approximately £423 million are under option and/or in advanced or bilateral negotiations with an additional approximately £1.1 billion of Pipeline Assets over which Investment Manager has submitted non-binding offers(1).
In addition to the above assets, the Investment Manager has identified further renewable energy investments with an aggregate value of approximately £3.0 billion which would potentially be suitable for acquisition by the Company. The Investment Manager has not yet completed preliminary due diligence nor have offers (binding or non-binding) been made in relation to such potential investments. The Investment Manager will source additional Renewable Energy Assets on an ongoing basis.
Accordingly, in order, inter alia, to allow the Company to continue to take advantage of such investment opportunities and in light of ongoing demand for the Ordinary Shares, the Board is launching the REX Retail Offer and the Placing.
The Directors intend to use the net proceeds of the REX Retail Offer and the Placing to repay all outstanding monies, if any, which have been drawn down under the Group's £150 million Revolving Credit Facility. As at the date of this announcement, no amount has been drawn down under the Revolving Credit Facility. The net proceeds of the REX Retail Offer and the Placing in excess of the amount drawn down under the Revolving Credit Facility (if any) shall be deployed to satisfy the Group's investment obligations in relation to the Spanish Solar Assets and the Irish Solar Assets which total approximately £80 to £85 million, excluding acquisition debt, as at the date of this announcement, to fund construction costs in relation to the Cumberhead Wind Farm, or to purchase investments which are consistent with the Company's investment objective and investment policy.
REX Retail Offer
The Company values its retail shareholder base, which has supported the Company alongside institutional investors since IPO in December 2019. Given the substantial support of retail shareholders, the Company believes that it is appropriate to provide its retail shareholders in the United Kingdom the opportunity to participate in the REX Retail Offer. The Company is therefore making the REX Retail Offer available in the United Kingdom through the financial intermediaries which will be listed, subject to certain access restrictions, on the Company's website https://octopusrenewablesinfrastructure.com/retail-offer/.
The REX Retail Offer will be open to eligible investors in the United Kingdom following the release of this announcement. The REX Retail Offer is expected to close at 3.00 p.m. on 2 December 2021. Investors should note that financial intermediaries may have earlier closing times. The REX Retail Offer may close early if it is oversubscribed.
To be eligible to participate in the REX Retail Offer, applicants must be a customer of one of the intermediaries listed on the above website, resident in the United Kingdom and aged 18 years or over.
The Company reserves the right to scale back any order at its discretion. The Company reserves the right to reject any application for subscription under the REX Retail Offer without giving any reason for such rejection.
It is vital to note that once an application for REX Retail Offer Shares has been made and accepted via an intermediary, it cannot be withdrawn.
It is a term of the REX Retail Offer that the total value of the REX Retail Offer Shares available for subscription at the Issue Price does not exceed the Sterling equivalent of €8 million.
The REX Retail Offer Shares will be issued free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu in all respects with the Company's existing Ordinary Shares. An interim dividend in respect of the quarter ending 31 December 2021, which is expected to be 1.25 pence per Ordinary Share, is expected to be declared in February and paid in March 2022 (the "Q4 Dividend"). All holders of Ordinary Shares on relevant record date in February 2022 will be entitled to receive the Q4 Dividend(2).
The REX Retail Offer is offered in the United Kingdom under the exemption against the need for a prospectus in section 86(1)(e) of FSMA. As such, there is no need for publication of a prospectus pursuant to the Prospectus Regulation Rules of the Financial Conduct Authority, or for approval of the same by the Financial Conduct Authority. The REX Retail Offer is not being made into any jurisdiction other than the United Kingdom or to US Persons (as defined in Regulation S of the US Securities Act 1933, as amended).
No offering document, prospectus or admission document has been or will be prepared or submitted to be approved by the Financial Conduct Authority (or any other authority) in relation to the REX Retail Offer, and investors commitments will be made solely on the basis of the information contained in this announcement and information that has been published by or on behalf of the Company prior to the date of this announcement by notification to a Regulatory Information Service in accordance with the Financial Conduct Authority's Disclosure Guidance and Transparency Rules, the Market Abuse Regulation (EU Regulation No. 596/2014) ("MAR") and MAR as it forms part of United Kingdom law by virtue of the European Union (Withdrawal) Act 2018 (as amended).
There is a minimum subscription of £1,000 per investor under the terms of the REX Retail Offer which is open to investors in the United Kingdom subscribing via the above-listed intermediaries. The terms and conditions on which investors subscribe will be provided by the relevant financial intermediaries including relevant commission or fee charges.
REX is a proprietary technology platform owned and operated by Peel Hunt LLP (registered address at 7th Floor, 100 Liverpool Street, London EC2M 2AT; FRN 530083).
Investors should make their own investigations into the merits of an investment in the Company. Nothing in this announcement amounts to a recommendation to invest in the Company or amounts to investment, taxation or legal advice.
It should be noted that a subscription for REX Retail Offer Shares and investment in the Company carries a number of risks. Investors should take independent advice from a person experienced in advising on investment in securities such as the REX Retail Offer Shares if they are in any doubt.
Key Investment Risks
An investment in the Company will place capital at risk. The value of investments, and any income, can go down as well as up, so investors could get back less than the amount invested.
Neither past performance nor any forecasts should be considered a reliable indicator of future results. Actual performance will, among other things, depend on factors such as wholesale power prices, power purchase agreements, regulatory environment, government incentives, exchange rates, inflation, grid connections, asset concentrations and site performance.
The Company will invest in renewable assets under construction and may invest into renewable assets which are in development and, therefore, may be exposed to certain risks, such as permit rejection, lack of grid capacity, cost overruns, construction delay and construction defects, which may be outside the Company's control.
Investment valuation is based on financial projections for the Company's relevant Renewable Energy Assets. Projections will primarily be based on the Investment Manager's assessment and are only estimates based on assumptions made at the time of the projection.
For further information, please contact:
Octopus Renewables Limited (Investment Manager)
Matt Setchell, Chris Gaydon, David Bird
Peel Hunt (REX Retail Offer Co-ordinator)
Al Rae, Sohail Akbar
020 7418 8900
Buchanan (Financial PR)
Charles Ryland, George Beale, Hannah Ratcliff
020 7466 5000
PraxisIFM (Company Secretary)
020 4513 9260
(1) There is no assurance that any of the assets which make up the pipeline will remain available for purchase after Admission or, if available, at what price (if a price can be agreed at all) the investments can be acquired by the Company. Following Admission the Company may or may not purchase any pipeline assets. Investments not comprised in the pipeline assets may also become available.
(2) There can be no assurance that the Q4 Dividend will be paid and the statement in respect of the expected Q4 Dividend should not be taken as an indication of the Company's expected future results and is not a profit forecast.
This announcement should be read in its entirety. In particular, the information in the "Key Investment Risks" and "Important Notices" sections of the announcement should be read and understood.
Octopus AIF Management Limited, being the alternative investment fund manager of the Company;
"Board" or "Directors"
the directors of the Company;
"Cumberhead Wind Farm"
a Renewable Energy Asset with a total installed capacity, once constructed, of 50MW conditionally acquired by the Group as a construction ready project in June 2021 and acquired in September 2021 and located in Cumberhead, Scotland;
the Company and each of its subsidiaries;
"Irish Solar Assets"
a portfolio of five Renewable Energy Assets located in Ireland with a total installed capacity, once constructed, of up to 250MW conditionally acquired by the Group in July 2021 with completion to occur once four of the sites become fully operational;
"Octopus Energy Group"
Octopus Energy Group Limited and its subsidiaries from time to time;
Octopus Capital Limited and its subsidiaries from time to time, including the AIFM;
"Octopus Managed Funds"
funds, finance vehicles or accounts managed or advised by a member or members of the Octopus Group or the Octopus Energy Group;
ordinary shares of £0.01 each in the capital of the Company;
"Renewable Energy Assets"
renewable energy assets in Europe and Australia, comprising (i) predominantly assets which generate electricity from renewable energy sources, with a particular focus on onshore wind farms and photovoltaic solar parks, and (ii) non-generation renewable energy related assets and businesses;
"Revolving Credit Facility"
the credit agreement dated 19 November 2020 and made between ORIT Holdings II Limited (a wholly owned subsidiary of the Company) (as borrower), Banco de Sabadell, S.A., London Branch, Intesa SanPaolo S.P.A., London Branch, National Australia Bank Limited, London Branch and National Westminster Bank PLC (as original lenders and arrangers), and National Westminster Bank PLC (as agent and security agent); and
"Spanish Solar Assets"
a portfolio of four Renewable Energy Assets located in Spain with a total installed capacity, once constructed, of 175MW conditionally acquired by the Group in September 2020 with completion to occur once the sites reach construction ready status.
This is a financial promotion and is not intended to be investment advice. The content of this announcement, which has been prepared by and is the sole responsibility of the Company, has been approved by Octopus Renewables Limited, which is authorised and regulated by the Financial Conduct Authority, solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 (as amended).
This announcement and the information contained herein is not for release, publication or distribution, directly or indirectly, in whole or in part, in or into or from the United States (including its territories and possessions, any state of the United States and the District of Columbia (the "United States" or "US")), Australia, Canada, New Zealand, Japan, the Republic of South Africa, any member state of the EEA or any other jurisdiction where to do so might constitute a violation of the relevant laws or regulations of such jurisdiction.
The REX Retail Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the "US Securities Act") or under the applicable state securities laws of the United States and may not be offered or sold directly or indirectly in or into the United States or to or for the account or beneﬁt of any US person (within the meaning of Regulation S under the US Securities Act) (a "US Person"). No public oﬀering of the REX Retail Offer Shares is being made in the United States. The REX Retail Offer Shares are being oﬀered and sold outside the United States in "oﬀshore transactions", as deﬁned in, and in compliance with, Regulation S under the US Securities Act. In addition, the Company has not been, and will not be, registered under the US Investment Company Act of 1940, as amended.
This announcement does not constitute an offer to sell or issue or a solicitation of an offer to buy or subscribe for REX Retail Offer Shares in the United States, Australia, Canada, New Zealand, Japan, the Republic of South Africa, any member state of the EEA or any other jurisdiction in which such offer or solicitation is or may be unlawful. No public offer of the securities referred to herein is being made in any such jurisdiction.
The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
Peel Hunt LLP ("Peel Hunt") is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for the Company and for no-one else and will not regard any other person (whether or not a recipient of this announcement) as its client in relation to the REX Retail Offer and will not be responsible to anyone other than the Company for providing the protections afforded to its clients, nor for providing advice in connection with the REX Retail Offer, Admission and the other arrangements referred to in this announcement.
The value of Ordinary Shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested. Figures refer to past performance and past performance is not a reliable indicator of future results. Returns may increase or decrease as a result of currency fluctuations.
Certain statements in this announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which may use words such as "aim", "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning, include all matters that are not historical facts. These forward-looking statements involve risks, assumptions and uncertainties that could cause the actual results of operations, financial condition, liquidity and dividend policy and the development of the industries in which the Company's businesses operate to differ materially from the impression created by the forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given those risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements.
These forward-looking statements speak only as at the date of this announcement and cannot be relied upon as a guide to future performance. The Company, the AIFM, the Investment Manager and Peel Hunt expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by the Financial Conduct Authority, the London Stock Exchange or applicable law.
The information in this announcement is for background purposes only and does not purport to be full or complete. None of Peel Hunt or any of its affiliates, accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to this announcement, including the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith. Peel Hunt and its affiliates, accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise be found to have in respect of this announcement or its contents or otherwise arising in connection therewith.
Any indication in this announcement of the price at which the Ordinary Share have been bought or sold in the past cannot be relied upon as a guide to future performance. Persons needing advice should consult an independent financial adviser. No statement in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that earnings or target dividend per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings or dividends per share of the Company.
Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into or forms part of this announcement. The REX Retail Offer Shares to be issued or sold pursuant to the REX Retail Offer will not be admitted to trading on any stock exchange other than the London Stock Exchange.
Information to distributors
Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"); and the product governance requirements contained within Chapter 3 of the FCA Handbook Product Intervention and Product Governance Sourcebook (the "UK Product Governance Requirements") and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements and UK Product Governance Requirements) may otherwise have with respect thereto, the REX Retail Offer Shares have been subject to a product approval process, which has determined that the REX Retail Offer Shares are: (i) compatible with an end target market of (a) retail investors, (b) investors who meet the criteria of professional clients as defined in MiFID II and Regulation (EU) NO 600/2014 as it forms part of United Kingdom domestic law by virtue of the EUWA and (c) eligible counterparties, each as defined in MiFID II and the FCA's Conduct of Business Sourcebook ("COBS"); and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II and the UK Product Governance Requirements (the "Target Market Assessment").
Notwithstanding the Target Market Assessment, distributors should note that: the price of the REX Retail Offer Shares may decline and investors could lose all or part of their investment; the REX Retail Offer Shares offer no guaranteed income and no capital protection; and an investment in the REX Retail Offer Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the REX Retail Offer.
For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II and COBS; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the REX Retail Offer Shares.
Each distributor is responsible for undertaking its own target market assessment in respect of the REX Retail Offer Shares and determining appropriate distribution channels.
It is further noted that the REX Retail Offer is only open to investors in the United Kingdom.